Tom Wurdack

This does not help getting an extension for the First Time Home-buyer tax credit.

By MARTIN VAUGHAN and JOHN D. MCKINNON
Tens of thousands of people submitted suspicious — and possibly fraudulent — claims for a federal tax credit meant for first-time home buyers, tax officials told Congress Thursday.

The Treasury tax-oversight office said at least 19,000 filers who hadn’t bought homes claimed $139 million in tax credits and were reimbursed, raising new worries about the housing stimulus as lawmakers consider extending the credit.

Treasury oversight officials said they have found an additional 74,000 tax-credit claims, valued at $500 million, where evidence of previous homeownership could make their claims invalid.

More than 500 people under the age of 18, including a 4-year-old child, also had their names on applications for the credit, which has no minimum-age requirement, federal officials said at a hearing on abuses of the program. Most of the claims involving children were made by parents who purchased a home but were ineligible for the credit because their incomes were too high, said J. Russell George, the Treasury inspector general for tax administration. The tax-oversight office doesn’t answer to the Treasury secretary.

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Lobbying intensifies to extend first-time buyer tax credit

By Kenneth R. Harney

Washington Post Writers Group

August 30, 2009

It’s one of the biggest unknowns bugging would-be buyers of houses and condos this summer: Will Congress let the $8,000 nonrepayable tax credit for first-time purchasers expire as scheduled about three months from now? Or will the credit get a second life and be extended for six to 12 months, taking pressure off buyers, real estate agents and settlement companies?

That’s an especially urgent matter if you’re a buyer just starting to shop and you see entry-level prices bottoming out or rebounding. The tax credit statute requires buyers to fully close on their purchases –– not just be under contract –– no later than Nov. 30. This doesn’t leave a lot of leeway for people who haven’t yet decided on a specific house and who haven’t nailed down mortgage financing.

The whole process of negotiating offers, signing sales contracts, applying for a loan and completing the closing can easily extend for two months –– or a lot more.

Given the rapidly approaching deadline, what’s the likelihood that Congress will blow the whistle and allow at least a little extra time? Though Congress is on its summer break, most members of the Senate and House use part of the August recess to listen to constituents back in their home districts.

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