It's official. In the wake of reports of first-time home buyer credit fraud, Rep. John Lewis has introduced a bill that he hopes will put a stop to the most egregious abuses.
Lewis' bill coincides with revelations during yesterday's hearing by the Ways and Means Oversight Subcommittee, which he chairs, on enforcement holes in the popular tax break.
Key provisions of H.R. 3901 would:
- Establish a minimum age of 18 to claim the credit. This was sparked by reports that individuals as young as 4 had filed for the credit.
- Require proof via a copy of documentation by the taxpayer when filing that an qualifying residence actually had been bought. In some cases, credit claims were made before the property purchase closed.
The bill also would give the IRS the authority to scan prior returns to determine eligibility.
In addition, H.R. 3901 would require more electronic returns to be filed by return preparers.
"This legislation will help ensure that the IRS has the tools and authority it needs to prevent abuse of this credit," said Lewis. "We must ensure that we are administering the credit accurately and strike a balance between issuing timely refunds of the credit and protecting federal resources."
The Georgia Democrat's bill has bipartisan support. Signing on as original cosponsors are Representatives Charles W. Boustany, Jr. (R-La.), ranking minority member on the Oversight panel; Joseph Crowley (D-N.Y.); Bill Pascrell, Jr. (D-N.J.); and Dina Titus (D-Nev.).
Credit extension indications? H.R. 3901 also has an
effective date of applying to "returns filed after December 31, 2010."
That's probably more of placeholder date than any indication
of how far in the future we can expect the credit to be continued. While it's a political no-brainer that some form of the credit will continue beyond the impending Nov. 30 cut-off date, there's no consensus on just how long an extension might be.
But you can be sure that Lewis' proposals will be rolled into whatever final legislation is passed to extend (or expand) the first-time home buyer credit.
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Nate
I was one of those “early filers” … in my zeal to get the credit, I sent my amended return in the week after our offer was approved, inspection went through, loan finalized, etc. The closing wasn’t until a few weeks later, the IRS kicked it back and said I needed to wait.
Of course, once we closed 8/31, I re-sent it two days later. I’m still waiting for the credit (and interest) and told them to direct deposit. Of course, I have yet to get the direct deposit … two friends amended their returns around the same time and asked for a check, which they received last week.
Roth & Company, P.C.
Homebuyer credit: end it, don’t mend it.
In the wake of rampant fraud in the first-time homebuyer credit — including home “purchases” by four-year-olds — a congresscritter…