John Lewis: 4-year-olds are getting federal tax credits for buying homes

It’s more than passing strange that, in the U.S. Senate, Johnny Isakson of Georgia has been pushing an expanded tax credit for homebuyers while, in the House, U.S. Rep. John Lewis of Atlanta is examining abuse of the same.

The following paragraphs are from Lewis’ opening statements at a hearing held this morning by a House Ways and Means subcommittee, which the Georgia congressman chairs:

“The tax credit was created to stimulate the economy and home sales. It was estimated that at least 2.2 million households would claim about $18 billion of tax credits. To date, about 1.4 million households have claimed nearly $10 billion. The majority of these households—60 percent of them—have incomes below $50,000.

“To ensure the credit achieved its goals, the Internal Revenue Service developed a program to timely process returns, and issue refunds, for those claiming the credit. I salute this effort.

“I am mindful, however, that this quick response came at a cost. The Service processed over one million returns claiming the credit before new fraud filters were in place. The result, so far, is that more than 100,000 exams have been opened involving the credit.

“We will hear today that taxpayers claiming the credit include those: who already owned a home, who had not yet bought a home, and who are children—some as young as four years old. There are possibly hundreds of millions of dollars that have been paid to taxpayers who are not entitled to the credit. We want to, and we need to, stop this fraud and abuse.”

Lewis has introduced this anti-fraud legislation, which his office said would:

– Require a minimum age of 18 to claim the credit;

–Require that taxpayers attach a copy of documentation to prove that they purchased a home;

–Provide the IRS with authority to look at prior year returns and determine if a taxpayer is eligible for the credit;

–And improve tax administration by increasing the number of electronic returns filed by return preparers.

For instant updates, follow me on Twitter.

131 comments Add your comment

Honestly

October 22nd, 2009
10:52 am

” . . . . who are not entitled to the credit.”

I direct the Congressman’s attention to the Earned Income Tax Credit, which is a check–from the government–paid to those who pay no income taxes whatsoever. You want to look at fraud, waste, and abuse, Sir, begin with the EITC.

ONE-TWENTY TWO » links for 2009-10-22

October 22nd, 2009
11:08 am

[...] John Lewis: 4-year-olds are getting tax credits for buying homes | Political Insider It’s more than passing strange that, in the U.S. Senate, Johnny Isakson of Georgia has been pushing an expanded tax credit for homebuyers while, in the House, U.S. Rep. John Lewis of Atlanta is examining abuse of the same. (tags: housing fraud tax_policy) [...]

AH

October 22nd, 2009
11:10 am

Seriously who are you and what have you done with John Lewis. John has never cared if about fraud before a day in his life.

merculf

October 22nd, 2009
11:10 am

Just goes to show you that you can’t trust anyone and these people are only out to help themselves. What a shame people.

call em out

October 22nd, 2009
11:13 am

so just because there are issues elsewhere we shouldnt address the ones we are aware of.
that is the mentality of the liberals.
People being dishonest is what is causing problems for the rest of us.
What I would like to see though is for these people to have to pay the credit back.
Those of us who got the tax break last year have to pay ours back. But the ones under Obama dont.
This is one of many reasons why our deficit continues to climb under this administration.
the deficit in 9 months under Obama is higher than all the presidents put together since the beginning of our country. WOW!! Dont listen to his words. Watch what he does!

cookie19

October 22nd, 2009
11:13 am

Where there is money involved, there will be fraud. When these bills are drafted do they think about the “what if”s ? That would solve a lot of problems. Why odes congress get a recess anyway? There is a constant need for a new law or revision of a current law.

mscutie78

October 22nd, 2009
11:14 am

Here someone is trying to bring an issue to light and you want to smash him for it! Wow…

cookie19

October 22nd, 2009
11:19 am

How about a tax credit for us who pay our taxes but barely make enough to pay bills and buy groceries? How about taking back the bonuses those “bailed out” executives recieved and give them to us taxpayers?

Chuck

October 22nd, 2009
11:20 am

John Lewis concerned about fraud in the system? Now I know we are living in a reverse world. Quick, somebody tell him that some of those supposed frauds involve black people, and he will quietly go away. Mr. Lewis, if you have spare time on your hands, drop this small potatoes issue and go after the billions in fraud in the medicare, welfare, and income tax systems. Oh, wait…..some of those also involve black people, so…..never mind.

cookie19

October 22nd, 2009
11:21 am

First comment, fourth sentence should read ” Why does Congrees get a recess anyway? ”

getting upset, typing too fast

Dan Dawg

October 22nd, 2009
11:22 am

OK conservatives, this is your chance to look balanced and fair and give John Lewis props on this one. Otherwise, you confirm that you are a mindless partisan hack.

cmsfk

October 22nd, 2009
11:22 am

Wow! There are billions of dollars of tax credit out there and there is fraud involved!? What a newsflash. The same 4-year-old who bought the house could have predicted this information.

This better amount to some big time, widespread fraud or else this grandstanding is a waste of time and more taxpayer $. Sounds like the IRS now has a fraud filter in place that has, um, ID’d fraud. Last thing we need is Congress jumping in the mix to muck it up even more …

HOW ABOUT ME

October 22nd, 2009
11:27 am

I never received a $8000 Federal Tax break for buying my first how…how about me? Where is mine? Oh, I must work for a living…thanks Mr. Lewis etal….

Honey

October 22nd, 2009
11:28 am

Sounds like Honestly is miffed about paying his(her) taxes.The EITC does not come out of their pockets just because they are required to pay taxes. God I love my job at the IRS.

Patrick

October 22nd, 2009
11:28 am

Motto for all of those who vote in 2010 and 2012, “If you’re in you’re out”. Stop sending these folks back to Washington to be your voice when it’s your voice they don’t hear any more.

Are you serious John Lewis

October 22nd, 2009
11:30 am

There’s always going to be some type of fraud.to be some type of fraud. We need to try to minize fraud and keep the program going for a well. There’s a lot of inventory out there.

Just an opinion.

Good week all.

VolMan

October 22nd, 2009
11:31 am

He also needs to look at the $1000 per child tax credit. I’ve seen it first hand how many of his constituents let others use their child’s SSN when they are not able to take advantage of it.

Patty

October 22nd, 2009
11:34 am

Cookie- Receive is spelled wrong. I before e except after c. Worry about other things!

DAVID

October 22nd, 2009
11:37 am

NO Kidddddddddddddddddddding.

DAVID

October 22nd, 2009
11:39 am

THERE IS FRAUD IN EVERY FEDERAL Give-away……….Lordy…lordy…lordy

Dave

October 22nd, 2009
11:39 am

Sure would be nice if these programs could be extended to everyone and not just first time home buyers. Yet another example of programs developed for the benefit of one group of people. Screw everyone who did the right thing the first time. Cash for clunker, lets give a break to those who bought gas guzzlers and screw anyone who did the right thing the first time. It really pays to do the wrong thing in America!

Kim

October 22nd, 2009
11:43 am

Chuck and people who think like Chuck, why do you think it involves black people? There are more white people in this country that are on welfare than there are black people. White people commit fraud just like black people. If we all do what’s right, we won’t have to worry about the race of the person, because we will all pay for it regardless. You are one foolish person. This article is only reminding us that where there is a will there is a way and someone is going to find how to steal no matter what.

Union City

October 22nd, 2009
11:44 am

I have heard that an old neighbor is renting and bought a truck with her tax credit. She has NOT and does not plan to buy a house. That’s fraud…..

AllAgesCanOwnHomes

October 22nd, 2009
11:45 am

I am unaware of any law that prevents a 4 year old from purchasing and owning a home. As such, a four year old should be perfectly eligible if he / she is a first time home buyer.

inou

October 22nd, 2009
11:46 am

Nothing the Government has ever done has been successful except for the military, and Obama is doing his darndest to destroy that. There is not enough money to keep on supporting everybody whose jobs are being lost due to Obama’s failed policies ( another half million lost last week,and yes, of course Bush’s ineptness too) while we continue to tank. Obama will forever blame Bush for all the evils under the sun as long as people keep buying it, but his bold promises as he campaigned are making him look like a first class wimp now. Anyone could fill his shoes if all they had to do was say, “duh, Bush started it”. Whoever isn’t paying attention needs to. This is sacrificing opportunities for your life, your kids lives, and our country. Don’t blow a good thing. Do not support this phony. His only agenda is his own power.

KJ

October 22nd, 2009
11:47 am

Cookie19: you’re correct but you should have stated more specifically – where there is a government run program involving money, there will be fraud. I hope everyone can add up the facts. Anytime you have a government run program ie; medicaid, medicare, social security, disability, unemployment, the IRS, etc, there is rampant fraud. The various departments, whose job is to oversee the funding, for the majority, could care less if someone is ripping off the government since it doesn’t directly affect their paycheck. So taxpayers pay more and more to criminals (which is exactly what you are if you are claiming benefits you’ve received fraudulently) and our country’s deficit get bigger and bigger. Just try to name one government program where money is involved that hasn’t seen massive fraud. Can’t do it can you? That’s exactly what the whole government run healthcare program they are pushing will be too. Another massively expensive money pit that does more harm than good. Our country is quickly going down the toilet. Our only chance of survival is to return to our founding roots of pure capitalism and then institute the FairTax. Our government needs a massive downsizing and the lazy drains on society need to get off their butts and quit expecting a hand out. We don’t owe you anything and unless you are elderly and disabled too severely to work go get a job. Our government needs to be more concerned with getting companies to return to our country to create jobs not how they can squeeze more money out of the few who are left.

atlsenga

October 22nd, 2009
11:47 am

Did these tax cheats who bought homes use ACORN for their home buying assistance? Just wondering.

inou

October 22nd, 2009
11:47 am

AllAgesCanOwnHomes: A four year old is not competent to own a home.

john j

October 22nd, 2009
11:49 am

100,000 files have been opened for investigation, this amounts to about 7% of all applicants. What percentage of this 7% will be found to be OK and what percentage will be found to be fraudulent. If it is up to half of the 100,000 it means 3.5% of the total is fraudulent. Just a guess on my part but a govt program with less than 3,5% fraud would probably be held up as an example of just how efficient the govt is.
(My first home had a 13.5% interest rate and Jimmy Carter could have cared less)

Dave

October 22nd, 2009
11:50 am

Inou, learn how to use “competent” in a sentence.

Reality

October 22nd, 2009
11:51 am

Inou, are you saying that it’s the government’s fault that people commit fraud?

Cicely

October 22nd, 2009
11:54 am

Actually sir you are incorrect. Earned Income Tax Credit, is as it suggests a program only available for those who have “earnings”. The credit increases the more your EARN. It is a refundable credit. It is not a credit given to people who do not pay taxes. Tax liabilities are determined based on a persons AGI. The EITC reduces a persons tax liability. If they have none then they are entitled to receive full credit or any portion after meeting their tax liability in a refund. EITC is more effective in lifiting people out of poverty than all other federal social programs combined. Please check your facts before you make blanket statements.

Brian

October 22nd, 2009
11:54 am

Actually, I am very thankful for the tax credit…it allowed me the chance to buy my first home. I appreciate that I do not have to pay it back, and I am truly sorry for those who do under the old administration…I applaud Lewis for bringing this issue to the forefront, however, it may be a day late and dollar short (no pun intended) because the fraud filtering should have been in place immediately…shame on the government for allowing yet another way for things to fall through the cracks. As far as bringing race into this issue…again, foolish comments only make the one commenting look more like a fool.

C.M. Thornton, III

October 22nd, 2009
11:55 am

AllAgesCanOwnHomes: A person under 18 cannot enter into a legal binding contract in Georgia, ergo, a four year old cant buy a home. However, a trust can be set up for a four year old which will transfer ownership of the home to the child when it turns 18…

As for Lewis, this has got to be a joke. Lewis himself is a joke. If he is really concerned about fraud, how about rampant welfare and voter fraud among his constituents? Oh wait, their black, so its OK….

Char

October 22nd, 2009
11:55 am

Now that loopholes have been found, close the loop holes. Severely punish the insensitive criminals. Don’t punish good law abiding taxpayers because Congress and IRS did not have checks and balances in place to prevent or detect these criminal acts. Make an example of the perpertrators. But, don’t stop with the first time homebuyers’ credit. Go after the other tax cheats as well, especially those who are hiding money in foreign countries and are abusing the Earned Income Credit. The middle class unfairly is carrying the burden while the rich and the poor are getting most of the benefits.

Corey

October 22nd, 2009
11:57 am

Last fall this nation and the world came very close to financial ruin facilitated by crafty financiers on Wall St., and some of you are more concerned about blasting a congressman who points out fraud. Is there something in the water that makes southerners so d3@# stupid?

techiegirl518

October 22nd, 2009
11:57 am

I can’t believe some of you are wondering if a 4-year-old could actually buy a house. You have to be 18 to enter into a legal contract.

The Stuff

October 22nd, 2009
11:58 am

Actually, a four year old can not own a home because ID is required to be witnessed signing the documentation. As it stands, if you are under 18 and your parents die, you can not legally possess their estate until you reach 18. A guardian must be appointed to maintain the estate until you are eligible. Thus, a guardian would represent a “4 year old” and cold not pass title to the home to that child until they were 18, thus eliminating the tax credit.

If law makers just put an extra day into writing the stipulations for these giveaways, a lot of this fraud would be more difficult to get away with thus reducing it. Why not include something like “Tax credit will be assessed upon verification by local government tax agencies and upon completion of years federal tax return”. Oh that’s right, its prejudice against those who can’t read or write.

KC

October 22nd, 2009
11:59 am

If they had required people to include copies of their purchase and sales agreement along with the form, it would have helped eliminate a lot of the fraud going on with this credit. All you had to do was complete a 1 page form and didn’t even have to list the purchase price of the home you bought, just how much of the credit you felt you were entitled to. Of course you were supposed to calculate the amount as 10% of purchase price of the home, but how many people do you think just put $8,000 on the form?

Also, I agree with someone else above who said it should have had to be repaid. 15 years to pay back $8,000 interest free is a great, great deal, and the government would have eventually gotten all their money back….

Dave

October 22nd, 2009
12:00 pm

Corey, the problem is Mr Lewis only points out some fraud. He ignores the fraud which involves his constituents.

fraudulentamerica

October 22nd, 2009
12:03 pm

This is the sad state of our country…in the worst of financial times, the same fraudulent spirit that got us into this mess is at it again. These people should pay back 7 times what they stole from “we the people” who pay the taxes. I have already paid over more in tax this year(the most ever as taxes go higher) so that these frauds can steal it back from me…and the feds want me to keep highering and providing jobs…they can’t even manage to keep more frauds from stealing more taxpayer dollars.

Dave

October 22nd, 2009
12:03 pm

And if you don’t like the south, what makes you want to live here? Oh because the North has been run into the ground by liberal policies and there are no jobs there. Got it.

Look before I leap

October 22nd, 2009
12:04 pm

Actually ALLAges, if the purchase of a home involves a contract, then there are laws which would indeed prevent a 4 year old from legally buying a home. In all 50 states, no one under the age of 18 can enter into a legally binding contract. Did you double up on your moron pills this morning?

Crunk D

October 22nd, 2009
12:04 pm

How about we end all these stupid tax credits and government handouts? I’m tired of subsidizing idiots who can’t handle their money.

Dave

October 22nd, 2009
12:05 pm

Well said Crunk D. Lets level the playing field.

RSC

October 22nd, 2009
12:06 pm

ACORN ACORN ACORN: the mantra of the simple-minded.

Fletch

October 22nd, 2009
12:07 pm

It is really sad that I used to care about this country and my community and now it is everyone for him/herself. If everyone else is sucking up government money, I don’t want to be left standing when the music stops.

I paid my mortgage and bills through the tough times and there is absolutely nothing for me. If I was irresponsible and didn’t dip into savings to pay my bills, I would be in better shape.

Cicely

October 22nd, 2009
12:07 pm

In order for the 4-year old to receive the credit they would have to file a tax return and be the primary SSN listed on the return. If you are listed as a dependent of someone else you are not eligible for credits on a tax return.

butch

October 22nd, 2009
12:09 pm

C M Thorton III, learn the usage of “their” vs. “they’re” and try again.

Dave

October 22nd, 2009
12:10 pm

Government programs are a redistribution of wealth. I realize they are a necessary evil, but how far are we going to go? I don’t think owning a home is a right. How much more will the people who pay taxes put up with? Is everyone blind to the fact that this tax break given to a certain group will be made up for by taxing the rest of us more. The money will have to come from somewhere…