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IR-2009-69, July 29, 2009
WASHINGTON -The Internal Revenue Service today announced its first
successful prosecution related to fraud involving the first-time homebuyer
credit and warned taxpayers to beware of this type of scheme.
On Thursday July 23, 2009, a Jacksonville, Fla.-tax preparer, James Otto
Price III, pled guilty to falsely claiming the first-time homebuyer credit on a
client’s federal tax return. Price faces the possibility of up to three years in
jail, a fine of as much as $250,000, or both.
To date, the IRS has executed seven search warrants and currently has 24 open
criminal investigations in pursuit of potential instances of fraud involving the
credit. The agency has a number of sophisticated computer screening tools to
quickly identify returns that may contain fraudulent claims for the first-time
homebuyer credit.
“We will vigorously pursue anyone who falsely tries to claim this or any
other tax credit or deduction,” said Eileen Mayer, Chief, IRS Criminal
Investigation. “The penalties for tax fraud are steep. Taxpayers should be wary
of anyone who promises to get them a big refund.”
Whether a taxpayer prepares his or her own return or uses the services of a
paid preparer, it is the taxpayer who is ultimately responsible for the accuracy
of the return. Fraudulent returns may result not only in the required payment of
back taxes but also in penalties and interest.
First-Time Homebuyer Credit
The First-Time Homebuyer Credit, originally passed in 2008 and modified in
2009, provides up to $8,000 for first-time homebuyers. The purchaser, however,
must qualify as a first-time homebuyer, which for purposes of this credit means
someone who has not owned a primary residence in the past three years. If the
taxpayer is married, this requirement also applies to the taxpayer’s spouse. The
home purchase must close before Dec. 1, 2009, to qualify, and the credit may not
be claimed on the purchaser’s tax return until after the taxpayer closes and has
purchased the home.
Different rules apply for homes bought in 2008.
Full details and
instructions are available.
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