CRIMINAL CHARGES - FIRST-TIME HOME BUYER CREDIT

[Edward]

Here's an article from the local business journal dated 21 Aug 09: "The IRS has an urgent message for would-be home purchasers: Make the most of the $8000 first-time buyer tax credit before it disappears Dec 1-- if you qualify. But if you don't truly qualify, don't try to play games with the credit. The IRS already has 24 criminal investigations of suspected fraud under way around the country. It has executed seven search warrants and last month a tax preparer in Florida entered a guilty plea on federal charges of fraud in connection with the first-time buyer credit. And with thousands of people buying houses and claiming tax credits, who's going to be able to check on all those filings? The answer from the IRS: WE ARE. In a statement at the end of July, the IRS said it uses "sophisticated computer screening tools to quickly identify returns that may contain fraudulent claims for the first-time homebuyer credit. The IRS won't discuss the nature of the screening it does, but it's clear from the number of investigations ongoing that claims for the credit are getting special scrutiny. In the case of the Florida Tax Preparer, one tip-off evidently was the sheer number of clients who claimed credits as first-time buyers. James Otto Price III of Jacksonville entered a plea of guilty to charges that he fraudulently submitted returns claiming tax credits for 15 clients, some of whom apparently did not understand what he was doing. He's awaiting sentencing and faces up to three years in prison, a $250,000 fine, or both. '' (Article written by

KEN HARNEY - 2009 Washington Post Writers Group).

[taxtrio]

Big scam in Detroit Michigan. On the news the other day. A group of guys were holding "Walk-a-way" seminars.

They claimed they could get people the first time homebuyer credit and they would never have to actually buy a home or live in it.

The scam worked this way. The "guys" would assign the taxpayer a "house".. an address at least. And sell the taxpayer a house for 80,000.00 on land contract. The taxpayer would never even see the house. The guys would then file the ammendment for the taxpayer and split up the refund with them. The guys told people that they would not have to pay back the 8,000.00 credit if the house were damaged or destroyed and couldn't be lived in.

The trick was, the houses were already burned out, or torn down (vacant lots). The taxpayer would never make any payments and would "default" on the landcontracts.

Pretty twisted!!! But they got caught. One of the people called the IRS and asked questions, then called the

local TV station who investigated and turned information over to IRS..... One of the guys that gave the presentations at the seminar was found to have a facebook page where he was bragging about scamming the govt....

I imagine there are ongoing investations into the fradulent 1040x's filed. Don't these people realize they are on the hook to the IRS????

I got all the information above from the local news investigation... We'll probably here more about these scams

as the year goes forward....

Taxtrio

[joanmcq]

I was just on the phone with an auditor asking about an amended return a client had filed. They are auditing or at least reviewing, all of them. She was pissed because she was processing amended returns when that wasn't her job, everyone was processing amended returns and they were taking 16 weeks to get them out because of the FTHB credit. They're looking at if you deducted mortgage interest in a previous year, RE tax, etc.