Internal Revenue Service Employees Made Questionable Claims for the Homebuyer Credit

Thursday, February 21st, 2019 @ 3:46PM

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To qualify as a first-time homebuyer, a taxpayer (or a taxpayer’s spouse) may not have previously owned a principal residence for three years prior to the purchase date of the home for which the Homebuyer Credit is claimed.

TIGTA reported that it developed computer programs to identify IRS employees claiming the first-time homebuyer who potentially did not qualify as first-time homebuyers.  Its determination was based on whether the employees had entered information on their individual income tax returns for one of the prior three years indicating that they may have owned a home.  These entries included deductions for home mortgage interest, real estate taxes, deductible points, and qualified mortgage insurance premiums.  TIGTA also considered whether these IRS employees had claimed a portion of the Residential Energy Credit.

In August 2009, TIGTA referred to its Office of Investigations 53 IRS employees who claimed the Credit despite indications that they owned a home within the last three years.  While the entries TIGTA focused on do indicate home ownership, the homes involved may or may not have been the employee’s principle residence, so the deductions did not automatically disqualify these employees from receiving the Credit.

TIGTA identified in its report that another 34 IRS employees claimed the Homebuyer Credit despite indications that they owned a home within the past three years.  TIGTA referred these IRS employees to its Office of Investigations in February 2010. TIGTA further reported that since eligibility for the homebuyer credit was extended into 2010 there maybe additional cases of where IRS employees claimed a tax credit they were not entitled to.

In sum, in its report TIGTA found that IRS employees were claiming a first time homebuyer credit when they were not eligible for it because they had already owned a home for the past three years. Since the tax credit offset the IRS employee’s tax liability to the Government the Government collected less tax than it should have. When this occurs the IRS fails in its mission to apply the tax law with integrity and fairness to all when some of its employees disregard that law and claim tax credits they are not eligible for.

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Categories: IRS Employees Pretend To Buy Houses To Steal New Buyer Tax Credit

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