I’ve been a fan of the $8000 first time home buyer credit.  It’s brought life and breath back to the housing industry, which in turn benefits our entire economy. However,  the reports of fraudulent use of the first time home buyer credit? Give me a break!  Weren’t the steps for qualification and the subsequent reporting of a home purchase to the IRS clearly outlined to prohibit or at least minimize fraud?

Apparently not, according to American Public Radio’s Scott Jagow on his Scratch Pad:

The IRS doesn’t require documentation to prove the person getting the credit actually bought a home.

The Wall Street Journal posted a story about the same problem with a mention of a 4 year old filing a tax return asking for the first time home buyer credit.

Is it easy to believe some people would try to get the tax credit, even though they weren’t first time buyers or people who even bought a home?  Unfortunately, yes.

Frank Keith, a spokesman for the IRS said:

…. the IRS doesn’t have the authority to reject a claim for the tax credit without doing a full audit first. Keith says his agency has flagged more than 100,000 tax returns for a second look.

But it’s truly mind boggling, infuriating, and sad to hear there isn’t a carefully thought out system to verify the first time home purchase.

I’ve been for the tax stimulus and bailouts, because something had to be done to save our economy and jump start it again.  But the plans should have been completely thought out.  There’s so much talk about the big bonuses still be handed out to bankers and Wall Streeters, which is also incomprehensible and infuriating, but this, too?  We still have people on all levels, from pseudo-first time home buyers to corporate execs, ripping off the taxpayers.  The stimulus plan has certainly not done what it needed to do to change that part of the economic problem.

What do you think?