by wildcherry on Thursday, October 29th, 2009 | Business, News | No Comments

The $8,000 tax credit for first-time homebuyers would be extended and some people who already own residences could claim a benefit under a proposal by Senate Democrats.

An agreement reached yesterday by the Democrats would let homeowners who buy a new home qualify for a $6,500 credit if they have lived in their prior residence for five years, according to Regan Lachapelle, an aide to Senate Majority Leader Harry Reid.

“The compromise we have now would expand the credit beyond first-time homebuyers,” Lachapelle said. Lawmakers expect to consider the measure as part of a bill to extend unemployment benefits, she said. That measure has been held up by a disagreement with Republicans over other proposed amendments.

Lawmakers have said they want to keep home sales from slipping as the economy struggles to recover from the worst drop in home prices since the Great Depression. The plan would extend the homebuyers credit, due to expire Nov. 30, to home purchases under contract by April 30, 2010, with borrowers allowed another 60 days to close the sale, according to a person familiar with the details of the agreement.

The credit would be available to individuals earning up to $125,000, or $250,000 for couples, up from $75,000 for individuals and $150,000 for couples under the current law, Lachapelle said.

Full Story:Bloomberg

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by wildcherry on Sunday, October 25th, 2009 | Business, News | No Comments

WASHINGTON (Reuters) — Thousands of individuals claiming the first-time home buyer’s $8,000 tax credit may have been trying to scam the system, including purported 4-year-olds and illegal immigrants, according to a watchdog report released Thursday.

Treasury Inspector General for Tax Administration J. Russell George told a House panel that more than 19,000 people filed 2008 tax returns claiming the credit for homes they had not yet purchased. George said his office had identified another $500 million in claims, by some 74,000 taxpayers, where there were indications of prior home ownership.

He told a House Ways and Means oversight subcommittee that they also found 580 taxpayers under the age of 18 who claimed $4 million in first-time home buyer credit. One was 4 years old.

“Some of our findings, while preliminary, are somewhat disturbing,” George said. Among the most striking instances of fraud include 4-year-olds, non-U.S. citizens and IRS employees inappropriately claiming the benefit, he said.

http://www.usatoday.com/money/economy/housing/2009-10-22-homebuyer-tax-credit-fraud_N.htm

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