More than a thousand prisoners, 241 of whom were behind bars for life, pocketed more than $9 million in tax breaks as part of Congress’ highly popular first homebuyer tax credit. All told, the housing tax credit, which has propped up the US’ wounded housing market for months, has lost nearly $30 million to fraud, according to a new Treasury Department report.
Here’s CNN Money on the report:
According to the report, 4,608 state and federal inmates filed for these tax credits, and that fraudulent refunds were doled out to 1,295 of them.
The inspector general’s report said the most “egregious” fraudsters were 715 prison lifers, including 174 who filed with the help of paid preparers. From this group, 241 lifers were awarded $1.7 million.
The problem was particularly bad in Florida: 61% of the lifers who got credits were incarcerated in the Sunshine State.
The homebuyer tax credit program was very specific about the time period in which homebuyers were allowed to participate, though this rule seems to be the most widely violated. The credit was for home purchases that happened after April 8, 2008, with a cut-off date that was eventually extended to May 1, 2010.