By JOHN D. MCKINNON
WASHINGTON -- The Internal Revenue Service is examining more than 100,000 suspicious claims for the first-time home-buyer tax break, another sign of potential trouble for the soon-to-expire program.
The measure, adopted in February as part of the economic-stimulus bill, gives first-time buyers an $8,000 tax credit in an effort to boost sales and stimulate the flaccid housing market. The program is set to end Nov. 30, but housing-industry leaders are lobbying Congress to extend it.
Some people in the real estate business are hoping the tax credit is increased to $15,000. This amount can be taken right off the top of a taxpayer's income
More than a million claims for the credit have been received so far, and housing-industry experts estimated that the credit has helped generate about 350,000 home sales that wouldn't otherwise have occurred. Some lawmakers and tax experts now say there is evidence that a significant number of the claims might prove to be unjustified or fraudulent.
"I am concerned about recent reports that there have been fraudulent schemes involving the credit," Rep. John Lewis (D., Ga.), chairman of a House Ways and Means oversight subcommittee, said in a statement. The subcommittee is planning a hearing on the problems on Thursday.
The IRS said it was investigating 167 "criminal schemes" involving the credit. IRS officials on Monday declined to describe the suspected schemes or provide additional details.
At a recent hearing of a White House tax advisory panel, Bonnie Speedy, national director of AARP Tax-Aide, a volunteer service for low-income people, suggested that abuse of the home-purchase credit appeared to be widespread, in part because of relatively loose standards for claiming the credit.
source: http://online.wsj.com/article/SB125599683058895389.html
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