One of the most concerning aspects of tax return scams is how easily personal information is fabricated.  This particular alleged fraudster was not only helping himself to the first-time home buyer tax credit but he was helping others scam the government too.  He claimed the credit even though he knew he wasn’t entitled.  (What’s his excuse? I forgot I had another house. Really, I did.)  The number of people he “helped” has yet to be released, but it sure does make you wonder about how and what information is being accepted on tax returns.  With the U.S. government drowning in debt, I bet they could really use the money being stolen out from underneath them.

According to the WPBF.com, a Florida man was indicted on charges of filing false income tax returns for himself and his clients.  The federal indictment detailed sets forth the facts involved in this case, alleging that the man falsely claimed the First-Time Home Buyer Credit (FTHBC) and other tax credits and deductions.  Through his tax return preparation business, he prepared an electronically filed phony tax returns using fake information to claim he and his clients were entitled to the FTHBC.  (Apparently, they thought they were entitled to other people’s tax money.)  Prosecutors estimate that the alleged fraud resulted in a total loss of between $400,000 and $1 million to the U.S. government.  (Now that’s a lot of houses claimed fraudulently.)

The article describes how the FTHBC program works:  “The Housing and Economic Recovery Act of 2008 established a refundable tax credit for first time home buyers equal to 10 percent of the purchase price, up to $7,500, for home purchases completed in 2008.”  This allows a taxpayer to repay the credit interest free for 15 years.

If convicted, he faces a maximum sentence of up to three years in prison and a fine up to $250,000.  So, here’s the question for the day:  how easy would it be for anyone to pull this scam off?

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