Washington, DC – October 29, 2009 – (RealEstateRama) — With new reports that hundreds of thousands are illegally taking advantage of a tax credit to help get first-time homebuyers into the housing market without actually purchasing a home, U.S. Senator Kirsten Gillibrand today co-sponsored legislation that would crack down on fraud and improve oversight of the first-time homebuyer tax credit. The U.S. Treasury Department Inspector General released a report this month revealing 167 schemes and over 100,000 individual cases of fraud related to the first-time homebuyer tax credit – costing taxpayers over $100 million.
“The first-time homebuyer tax credit has been an important tool to restore confidence in our housing market and rebuild our economy, but we need to ensure accountability and make sure no one is wrongly taking advantage of the credit,” Senator Gillibrand said. “This legislation would help ensure legitimacy of first-time homebuyers and penalize anyone attempting to steal taxpayer dollars. It will bolster our efforts to help families buy their first homes, spurring real economic recovery and job growth.”
The first-time homebuyer tax credit has been a driving force to stabilize the housing market and spur new buyers. Senator Gillibrand is pushing to extend the credit to give the housing market more time to stabilize and help more Americans purchase their first home. In fact, since the start of this year, the tax credit has led to over 150,000 new and existing home sales, according to estimates from the National Association of Home Builders (NAHB). And Moody’s Chief Economist Mark Zandi expects the credit to draw nearly 400,000 buyers into the market by the end of the year. To crack down on fraud and prevent future misuse of the credit, Senator Gillibrand is co-sponsoring legislation introduced by Senator Bob Casey (D-PA) that would require more oversight from the IRS. The Senators are seeking to attach this language to legislation that would extend the credit.Specifically, the legislation would require anyone trying to take advantage of the tax credit:
- To be 18 years of age;
- To submit their settlement statement with their tax returns; and
- To submit a certified statement of eligibility signed by the person who conducted the closing of the transaction.
In addition, it would require the IRS to report to Congress on any prosecutorial and investigatory actions related to the tax credit within 90 days after enactment and quarterly thereafter.
