WASHINGTON — The Internal Revenue Service has paid out more than a half-billion dollars in home buyer tax credits to people who probably didn’t qualify, a government investigator said yesterday.
Most of the money — about $326 million — went to more than 47,000 taxpayers who didn’t qualify as first-time home buyers because there was evidence they had already owned homes, said the report by J. Russell George, the Treasury inspector general for tax administration. Other credits went to prison inmates, taxpayers who bought homes before the credit was enacted, and people who did not actually buy homes.
“The IRS has taken positive steps to strengthen controls and help prevent the issuance of inappropriate home buyer credits,’’ George said. “However, many of the actions occurred after hundreds of thousands of home buyer credits had already been issued, including fraudulent and erroneous credits totaling millions of dollars.’’
The agency questioned some of the findings, but said it would follow up.
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