The report, by the Treasury Inspector General of Tax Administration, contains the results of audits that ended up denying more than $1 billion worth of credits. The most egregious cases were:
- Claims from prisoners who were incarcerated at the time of their supposed home purchases and did not purchase with a spouse. The credit applies to primary residences only, but some 715 of these prisoners who claimed the credit were, in fact, serving life sentences.
- Multiple claims on the same address. In the worst example of this, 256 claims for the credit were filed -- on only five addresses. The Bloomberg story notes that one address was responsible for 67 claims. (In an example of the thoroughness of your tax dollars at work, yes, the government checked, and none of these addresses were condo complexes.)
- Claims for credits on homes purchased before the program took effect. To be eligible for the credit, homes must have been bought after April 8, 2008. However, some claims filed were for purchases made earlier in 2008 -- and a dozen claims were filed for homes purchased in 2000!