Grab your swim fins and masks, because we’re gonna get wet today.
No! We’re not “free-diving” looking for lost shipping containers to salvage in our quest to build a home! There are enough of them parked on our shores already! Mountains of them!
You see, we should at least get as wet as the knuckleheads in Congress, who see nothing wrong with piling so much debt onto our already aching backs, that we can’t labor under the load.
Wait… that’s not it…
But, the water IS getting deeper.
There’s talk of postponing the actual release of hundreds of thousands of tax credit claims, due to fraud.
The guys hiding behind those steel desks at the Internal Revenue Service are examining more than 200,000 suspicious claims for the first-time home-buyer tax break.
I just wrote a post about this credit. You did read it, right?
Well, it’s just another sign of trouble for the soon-to-expire “give-away” program.
Now, I recently told you about this bill, so that you wouldn’t get scared when you heard all that howling outside, as builders try to pry more money out of Congress, in the form of an extension to the “first-time home buyer” tax credit.
In February, those wizards in Congress adopted a measure as part of the economic-stimulus bill, that gives first-time buyers an $8,000 tax credit. This was done in an effort to boost sales and stimulate the hemorrhaging housing market.
Alas, all good things must come to an end, so the program is set to end Nov. 30, 2009.
But… builders, housing-industry leaders, and lobbyists by the busload are lobbying those poltroons in Congress to extend it.
In fact, lobby money is flying around Washington DC right now, like hornets after that naughty rock-wielding kid who challenged their nest! 🙂
According to records, over one million claims for the credit have been received so far, and experts have estimated that the credit has helped generate over a quarter of a million home sales (conservatively) that wouldn’t (and probably couldn’t have) otherwise occurred.
But there’s trouble brewing… Some lawmakers and tax experts now say there is evidence that a significant number of the claims might prove to be unjustified, or even fraudulent.
Why? Because Congress knows the smell of crime when they smell it. They’re used to it. You can’t go to Capitol Hill without having to hold your nose…
“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.
Why? Because there will be cameras there! It’s better than a CSPAN BBQ!
The IRS says that it is currently investigating several hundred “criminal schemes” involving the credit, but because of “legal requirements,” IRS officials declined to describe the suspected schemes or provide any additional details.
The National Director of AARP Tax-Aide, Bonnie Speedy, which is a volunteer service for low-income people, suggested that criminal abuse of the home-purchase credit appeared to be running rampant, in part because of relatively loose standards for claiming the credit in the first place.
The credit “has some fraud issues because it’s not being done at the time of the sale,” said Ms. Speedy. “People are filing for the home credit who don’t have a right to file for it.”
You see… the taxpayers don’t have to file their claims as part of any on-going real-estate transaction. All you have to do is file or amend their income-tax returns to claim the $8,000 bucks in the form of a credit.
I “googled” her, so I could include a photo, but all I found was a girl on MySpace, and a porn star… Oh well…
An IRS spokesman said the agency “will vigorously pursue those who filed fraudulent claims” for the credit.
And we know what that means… Bite marks in your butt, for sure. The IRS pursues money, like bears pursue campers in the possession of honey.
You in a heap O’ trouble now, boy… 😉
“The IRS recognizes that there is a potential for fraud whenever a new refundable tax credit … is put in place,” agency spokesman Frank Keith said. “As we began implementing this credit in the days after the Recovery Act legislation was passed, we also identified the different types of potential fraud, and matched our compliance program to those abuses.”
A spokesman for the National Association of Realtors, Lucien Salvant, said, “Any time there is a lot of money around, there is going to be people attracted to it with evil intent.”
Like, for instance… Realtors trying to close a deal… 🙂
Okay, that was uncalled for… I apologize…
I left out Real Estate Lawyers… 🙂
(Ain’t I a stinker?” 🙂
Housing-industry officials recently have stepped up their lobbying for an extension of the credit.
But, I already told you that. You WERE paying attention, right? 🙂
The builders want an extension… say… like about 12 months. And let’s just forget about this “first – time buyer” nonsense, huh? How about you guys make it apply to EVERYBODY? Hmmm?
“Our fragile economy is just beginning to show signs of recovery,” the letter says. “We should not jeopardize that recovery by letting this tax credit expire.”
That Realtor guy I quoted earlier? Well… Mr. Salvant said the industry groups weren’t suggesting any changes to the credit policy aimed at diminishing possible fraud.
Why not? Well, according to a Realtor I spoke with this morning… that would make people leery of using that credit, and those deals wouldn’t get past the shadow of the front porches of all those empty houses.
One proposal by Sen. Johnny Isakson (R., Ga.) and others to extend the credit and make it available to all home buyers through June 2010 carries a price tag of about $16.7 billion.
That proposal would raise the income ceiling for eligible home buyers to $150,000 per year for an individual and $300,000 for a couple. Currently the credit phases out for individuals earning more than $75,000 and married couples earning more than $150,000.
What do my favorite “think tank guru’s” say about all of this?
Ted Gayer, an economist at the Brookings Institution, a liberal think tank based in Washington, estimated that the current credit costs the government about $43,000 for each additional home sale it generates, because most of the two million or so home buyers expected to claim the credit would have bought a house anyway. Expanding the credit to all home buyers would raise the government’s cost per additional home sale to more than $250,000, he said.
Yikes… That mountain of debt is getting higher. I hope our children and grandchildren can find enough oxygen masks…