With new reports that hundreds of thousands are illegally taking advantage of a
tax credit to help get first-time homebuyers into the housing market without
actually purchasing a home, U.S. Senator Kirsten Gillibrand today co-sponsored
legislation that would crack down on fraud and improve oversight of the
first-time homebuyer tax credit. The U.S. Treasury Department Inspector General
released a report this month revealing167 schemes and over 100,000 individual
cases of fraud related to the first-time homebuyer tax credit – costing
taxpayers over $100 million.
“The first-time homebuyer tax credit has been an important tool to restore
confidence in our housing market and rebuild our economy, but we need to ensure
accountability and make sure no one is wrongly taking advantage of the credit,”
Senator Gillibrand said. “This legislation would help ensure legitimacy
of first-time homebuyers and penalize anyone attempting to steal taxpayer
dollars. It will bolster our efforts to help families buy their first homes,
spurring real economic recovery and job growth.”
The first-time homebuyer tax credit has been a driving force to stabilize the
housing market and spur new buyers. Senator Gillibrand is pushing to extend the
credit to give the housing market more time to stabilize and help more
Americans purchase their first home. In fact, since the start of this year, the
tax credit has led to over 150,000 new and existing home sales, according to
estimates from the National Association of Home Builders (NAHB). And Moody’s
Chief Economist Mark Zandi expects the credit to draw nearly 400,000 buyers
into the market by the end of the year.
To crack down on fraud and prevent
future misuse of the credit, Senator Gillibrand is co-sponsoring legislation
introduced by Senator Bob Casey (D-PA) that would require more oversight from
the IRS. The Senators are seeking to attach this language to legislation that
would extend the credit.
Specifically, the legislation would require anyone
trying to take advantage of the tax credit:
- To be 18 years of age;
- To submit their settlement statement with their tax
- To submit a certified statement of eligibility signed by
the person who conducted the closing of the transaction.
In addition, it
would require the IRS to report to Congress on any prosecutorial and
investigatory actions related to the tax credit within 90 days after enactment
and quarterly thereafter.