The Justice Department announced that it’s suing seven tax preparers across the country to stop them from fraudulently claiming tax credits for first-time home buyers who are not eligible for the tax refund.
The department is accusing the tax preparers of using their customers’ information to claim the first-time home buyer credit, even though they had not purchased a home or signed a contract for purchase in the necessary time frame, according to a statement from the Justice Department.
Among the cases, a McAllen, Texas, man is accused of claiming at least $985,000 in tax credits in 2009, and in a Philadelphia federal court case, federal officials are accusing a tax preparer of claiming at least $1.2 million in tax credits in 2009 for his customers.
The first-time home buyer tax credit was first created in 2008. Congress extended the tax credit in 2009, increasing the maximum allowable amount to $8,000. The credit expired in 2010, but eligible taxpayers can still claim it on their 2010 federal income tax returns.
The Justice Department says it’s cracking down nationwide on false claims for tax credits.
We are working hard to ensure that those who try to cheat our country by filing phony claims for tax credits do not get away with it, says John A. DiCicco, Acting Assistant Attorney General of the Justice Department’s Tax Division, in a public statement. “This kind of tax fraud is an insult to hard-working Americans who legitimately qualify for these tax credits.
The seven most recent lawsuits were filed in federal courts in five estates: Texas, Pennsylvania, Florida, New Jersey, and Alabama.
Source: “Justice Department Announces Indictment and Six Lawsuits Targeting False Claims for First-time Homebuyer and Earned-Income Tax Credits,” U.S. Justice Department (Feb. 9, 2011)