Thursday, October 22, 2009

1st-Time Homebuyer Tax Credit Loaded With Fraudulent Schemes

Shouldn't surprise anyone - seems like about 80% of the housing and mortgage market is riddled with interminable fraud.  This is reason enough ALONE to not extend the 1st-time homebuyer tax credit.  From the Inspector General for Tax Administration:
He told a House Ways and Means oversight subcommittee that they also found 580 taxpayers under the age of 18 who claimed $4 million in first-time home buyer credit. One was 4 years old..."Some of our findings, while preliminary, are somewhat disturbing," George said. Among the most striking instances of fraud include 4-year-olds, non-U.S. citizens and IRS employees inappropriately claiming the benefit, he said. (Here's the link:  More Systemic Fraud)
I can think of several other reasons not to extend the tax credit - about $8,000 of them.  I'm not sure why my taxes should be used to put someone into a house who has a high probability of defaulting on that house within the first year.  The only real beneficiaries are the real estate and mortgage brokers.


  1. Dave,
    Thanks for the GLD report.

    Glad you posted this article, I was looking for one (and I can hear NBC Nightly News doing a segment on this in the background). This is a key issue about all these stimulus games; fraud and abuse is rampant. Also, we have no idea how many people that take this credit will have to forfiet it later if they move/get foreclosed in within 3 years. Just say NO to renewal.

  2. hey gyc: in the GLD report, I did not hit every loophole in the prospectus. there are several more. I tried to hit the big ones.

    GLD is on gigantic gold leasing operation and that's why it was legally set up the way it was set up. There isn't ANYONE who is entitled to go look at one gram of bullion being held by subcustodians. It's a god damn joke. The Custodian isn't even required to have contractual agreements with the subs.

    GLD is eventually going to incinerated just like Enron did. 20 years ago, the SEC would not have approved of the GLD prospectus the way it is written.

    Just another example of the balatant fraud in our system.

  3. Dave,
    No one can hit every loophole in GLD! Great effort and a great report, my thanks.

    You should change the 1oz Silver Eagle picture to Mexican Libertads or Canadian Maple Leafs, my two favorites!