When Congress decides to give away money; there is no shortage of people willing to take it – even if that means illegally.
Back in 2008, Congress approved a temporary $7500 tax credit for first time home buyers.
That credit was extended twice and increased to $8000.
The intention was to breathe some life into the housing market that was severely damaged by the sub-prime mortgage crisis and economic recession.
So far so good, except Congress failed to include verification and enforcement requirements to prove eligibility for the credit.
Not surprisingly, scores of fraudulent claims were filed to receive the credit, including from more than 100 IRS agents that the IG says falsely filed for the credit themselves.
“It is incomprehensible that this many IRS employees improperly claimed the homebuyer tax credit,” said Sen. Orrin G. Hatch of Utah, the top Republican on the Senate Finance Committee, according to the Washington Times. “These are the very people who are supposed to fairly enforce our tax laws, but seem to instead be taking advantage of that expertise for their own personal benefit.”
The Inspector General's office has reported to Congress that more than half a billion dollars has been paid out to unqualified people.
That would mean at least 62,500 cases of people caught with their hand illegally in the cookie jar.
Investigations of the IRS agents are still ongoing.
But, already we know that at least one agent, Catherine Griffin, had actually set up her own side business charging "friends and family" $2000 each to jigger their IRS documents to claim the tax credit.
The Times says that the IRS has stonewalled, asking them to submit questions in writing, which they did.
But instead of getting answers, the newspaper reports that they got “a general statement saying the agency takes compliance with tax laws ‘very seriously’ and promised ‘strong action, including dismissal’ when it finds that an erroneous claim has been made.”
Ms. Griffin thus far has pleaded guilty to “accessing a computer without authorization,” according to Times reporter Stephen Dinan.
Is this what he’s talking about when Barack Obama says he wants to "spread the wealth" around?
Someone to Remember on Memorial Day: John Ransom
An Interview with Kansas City Fed President Thomas Hoenig: Larry Kudlow
IG: IRS Agents Falsely Claim Housing Credit: Bob Beauprez
What a Waste!: Bob Goldman
A Securities Law Primer for Startups (Part 1 of 2): Cliff Ennico
Sky's Not Falling, Just Prices: Gil Morales and Chris Kacher
How to Go to Congress and Become a Millionaire: John Ransom
Hyperinflation Nonsense: Mike Shedlock
Obama and the Arab Spring: George Friedman
Read Ransom's Daily Market Commentary at the Ticker