Skip to main content

IRS Draws The Line On Tax Credits

The administration's commitment to transparency is coming along pretty well these days. For example, it's becoming clearer and clearer what the standard is for considering anti-fraud measures for the home buyer tax credit program. Evidently we have breached the tolerance level for the number of individuals currently in kindergarten who were approved for the $8,000 credit on their tax returns. In addition to the one 4-year old who did his or her part to help the housing recovery efforts, 581 other individuals under the age of 18 were granted the credit as well.

As much as one would like to think this was proof of a growing wave of young entrepreneurs out there, the IRS has another explanation: fraud on behalf of their parents whose incomes disqualified them. Consequently, the time has (possibly) come for action.

The (Oversight Subcommittee Chairman John) Lewis bill adds a minimum age of 18 to claim the credit, requires inclusion of the HUD-1 form, and gives IRS authority to look at prior-year returns to determine whether a taxpayer is eligible for the credit

So to other would-be 6-year applicants like F. Heene who listed the address of his new pad as 'About 10 miles north of DIA at 7500 feet and falling fast', be warned, the authorities are on to you.
House Considers Antifraud Measures for Home-Buyer Credit [WSJ]