There’s always something to howl about

The bad news: Tens of thousands of people, including IRS agents and including at least one four-year-old, fraudulently claimed the $8,000 first-time home-buyer’s tax credit. The good news? When these morons take over your health care, you’ll probably die before you suffer too terribly much…

From Politics Daily, the you-just-can’t-make-this-shit-up section:

Four-year-olds are adorable, trustworthy, and, having never owned a home before, fully eligible for the first-time homebuyer tax credit that Congress passed in 2008.

As a result of that loophole and numerous faulty reporting mechanisms, a House panel learned Thursday of tens of thousands of cases of fraud in the tax credit program, including more than 500 instances of people using their children — including a four-year-old — to apply for the credit to get around income caps and a requirement that the purchaser has never owned a home.

Together, fake or faulty claims for the $8,000 refundable tax credit may have cost the government up to half a billion dollars so far, investigators told the Ways and Means subcommittee.

Russell George, an inspector general with the Treasury Department, told the subcommittee about the most brazen instances of bogus claims that he had come across since the IRS created a filtering system last May to weed out suspicious applications.

George said he had found nearly 20,000 returns for people who may not have actually purchased homes; thousands for people who already owned homes; 3,200 taxpayers who could not prove they were in the country legally; and an unspecified number of IRS employees wrongly applying for the credit.

It is completely implausible to me that anyone could expect anything other than disaster from government-run anything. I like to say that governments are only good at one thing — killing people — but even that isn’t true of the U.S. government: The Army expends 20,000 rounds of ammunition for every confirmed kill. No worries, though:

This week Sens. Chris Dodd (D-Conn.) and Johnny Isakson (R-Ga.) began a push to expand the credit to all homebuyers and extend the deadline, now set for Nov. 30th, to July 2010.

Good plan…


8 Comments so far

  1. mike mcc October 25th, 2009 2:08 pm

    What are you suggesting? We just give up?

    The IRS has some very powerful tools at their disposal. They will work out the details, and some will perhaps do some jail time.

    Fraud does need penalties, and the $8000 level of tax fraud is far less than the fraud perpetuated on middle America by some of the recipients of TARP funds.

  2. Greg Swann October 25th, 2009 4:39 pm

    > What are you suggesting? We just give up?

    A fine idea! Doing the same thing over and over again and expecting different results is how some people define insanity. Simply ceasing to bang our heads against the wall will be a salutary sign of recovery.

    Here’s a better idea: Let’s cut government at all levels by 50% — this month. Next month we can cut 50% of the remainder. After 50 or 75 months of that, we might wake up to the idea that the absolute worst peril to human life is government. If not, we can just keep cutting by 50% a month indefinitely. A infinite series will eventually converge, but that will be a fun process to observe, just by itself.

  3. Ashlee October 25th, 2009 6:49 pm

    Every time our government does something they never think all the way through. It was so easy to apply for the credit and it didnt really take anything to prove you even bought the house. It was bad news waiting to happen before it even got started.

    I do agree that it helped just needed to be monitored more closely.

  4. Robert Kerr October 25th, 2009 9:30 pm

    $1B? Chump change compared to the magnitude of mortgage fraud that was perpetrated by private lenders.

    I would guess that everyone here has knowledge of at least $1M in fraudulent stated income loans that were written up. And the lenders here probably know of 10-50 times that.

    I know well over $1M and that was just from being in the next office and observing. When a couple shows up in a 10-year-old car, with 3 hungry kids in dirty clothes, we all know they don’t make $100K/yr.

    So let’s cut the plausible deniability BS, shall we? You knew. We *all* knew.

    Show of hands: how many people want the government to go after the crooks who fraudulently claimed the tax credit, costing us $1B?

    Now, how many want the government to go after the crooks, the lenders, the originators, who wrote all these fraudulent stated income loans?

    Hey, all the hands went down!

    So, where are the threads here explaining how private lenders never think all the way through, always mess things up, can’t be trusted, are all crooks, etc, like the ones here that constantly eviscerate government?

  5. Genuine Chris Johnson October 26th, 2009 12:42 pm


    If your rhetorical skills advance beyond ad hominem, please feel free to add to the discourse.

    If all you can do is cast aspersions upon the integrity of others to redirect us from the enslaving serfdom that the government causes, inform me of that, also so I be advised to skip past anything I ever see you write.

  6. James Boyer October 27th, 2009 8:38 am

    I am not of of the opinion that everything the government does is bad. Sure there is going to be some fraud, but heck look at the fraud that Countrywide and AIG put to all of us.

    I have seen a suggestion for stimulating the economy. I thought it made sense. The suggestion was to allow anyone to deduct dollar for dollar what ever they put down as cash on the purchase of a home. You put down 100K and that is 50% you get to deduct 100K. Seemed like a more fair way of stimulating the whole market, rather then just the bottom segments of the market.

  7. Dylan Darling October 28th, 2009 2:03 pm

    I wish I owned a house when I was 4 years old!

    Fraud is everywhere, there is no way around it. It will be a part of our society forever. The first time homebuyer credit has helped out our market tremendously, and I want it to be extended… but think it needs to be re-written. Take out the loopholes. Make it truely for first time homebuyers.

  8. Jeremy October 29th, 2009 8:01 am

    I was just reading the other post about extending or stopping the $8000 tax credit, clicked over to Drudge and found this:

    The average rebate was $4,000.
    But the overwhelming majority of sales would have taken place anyway at some time in the last half of 2009, according to That means the government ended up spending about $24,000 each for those 125,000 additional vehicle sales.

    I’m sure there’s fraud involved in cash for clunkers as well, but $24k in tax payer funds per clunker is further proof that our gov’t is worthless and not worthy of spending ANY more of our money.