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.
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