$9M in homebuyer tax credits go to prisoners

Nearly 1,300 incarcerated prisoners — 241 of whom were serving life sentences — were among those who received the popular federal homebuyer tax credit nationwide, according to a report released today by the Treasury Inspector General for Tax Administration and the Internal Revenue Service.

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In addition to the $9.1 million the government doled out to prisoners, another $17.6 million went to 2,555 taxpayers who purchased homes prior to the date when the tax credit was supposed to take effect. And 10,282 tax credits were granted to people who listed the same homes as other tax credit applicants — which likely amounts to tens of millions of dollars worth of erroneous tax credits, the report says.

In one case, 67 different taxpayers claimed the tax credit for the purchase of the same home. “This is very troubling,” J. Russell George, the Treasury inspector general for tax administration, said in a statement. “Congress created and modified the homebuyer credit to stimulate the economy and help taxpayers achieve the American Dream, not to line the pockets of wrongdoers.” TRD