1,295 Prisoners Claimed the First-Time Homebuyer Tax Credit

June 23, 2010 | Last updated: July 31, 2020

The Obama administration homebuyer tax credit program granted $9.1 million to 1,295 prisoners who were incarcerated when they said they purchased their home. Many such discrepancies are identified in a report by the Treasury Department Inspector General for Tax Administration and Internal Revenue Service today.

“In swiftly making the First Time Homebuyer Credit immediately available to more than 2.6 million homebuyers, a very small number of payments were made to prisoners incorrectly, which the IRS is now taking all steps to recapture and to prevent going forward,” the IRS said. “The IRS will follow up on every instance of an improper prisoner payment and take swift and appropriate enforcement actions.” It has also promised to go after and recoup any other losses from fraudulent claims on the effective, if easy-to-game, program.

Other issues in the full report: 2,555 taxpayers received $17.6 million for homes purchased prior to the dates allowed by law; 241 prisoners claimed the credit while serving life sentences. (None of the prisoners cited in the report were filing joint returns either, by the way.) In one case, 67 taxpayers claimed the credit on the same home. All in all, more than 10,000 filed for the credit on homes used by other taxpayers to claim the credit. And, 34 IRS employees claimed the credit despite already owning homes — in addition to the 53 IRS employees publicly censured for doing the same last summer.