The Internal Revenue Service has prosecuted a tax preparer who used the First-Time Homebuyer Credit in a fraud scheme that appears to be an increasing trend.
On Thursday, July 23, James Otto Price III, a Jacksonville, Fla.-based tax preparer, pled guilty to falsely claiming the credit on a clients federal tax return. He faces up to three years in prison and a fine of up to $250,000.
To date, the IRS said it has executed seven search warrants and currently has 24 open criminal investigations in pursuit of potential instances of fraud involving the credit. The agency uses sophisticated computer-screening tools to quickly identify returns that may contain fraudulent claims for the credit.
We will vigorously pursue anyone who falsely tries to claim this or any other tax credit or deduction, said IRS Criminal Investigation chief Eileen Mayer in a statement. The penalties for tax fraud are steep. Taxpayers should be wary of anyone who promises to get them a big refund.
The First-Time Homebuyer Credit originally passed in 2008 and was modified in 2009. It provides up to $8,000 for first-time homebuyers. The purchaser, however, must qualify as a first-time homebuyer and cannot have owned a primary residence in the past three years.
If the taxpayer is married, this requirement also applies to the taxpayers spouse. The home purchase must close before Dec. 1, 2009, to qualify, and the credit may not be claimed on the purchasers tax return until after the taxpayer closes and has purchased the home. Different rules apply for homes bought in 2008.
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access