Busted! First Time Homebuyer Tax Credit Fraud

On Wednesday our friends at the IRS announced their first successful prosecution related to fraud involving the first-time homebuyer tax credit.

On Thursday July 23, 2009, a Jacksonville, Fla.-tax preparer, James Otto Price III, pled guilty to falsely claiming the first-time homebuyer credit on a client’s federal tax return. Price faces the possibility of up to three years in jail, a fine of as much as $250,000, or both.

Ouch.

There is more detail in an article posted at jacksonville.com. Things like Mr. Price was on probation for forgery, he was indicted on 35 tax-fraud counts (15 involved the first time home buyer tax credit) and my favorite part of the article:

Price, a married father of three, told U.S. Magistrate Howard Snyder he didn’t think he was in the wrong until he read the statute he was charged with.

Are you kidding me?

You make up addresses, you flat out lie and tell your clients you can qualify for the tax credit by working two jobs, and you skim a thousand bucks off your clients refund and you don’t think you are in the wrong?

Have fun in the pokey.

Folks, here’s the deal. Even if you have someone prepare your taxes, YOU are still responsible for the accuracy of the return. The tax code is ridiculously complex, but if you see things on your return like the address of some home you don’t know exists, if someone tells you that you get a homebuyers tax credit for working two jobs, then think about what you’re signing. If it doesn’t make sense, don’t sign the return.

Mr. James Otto Price may be the first person arrested for home buyer credit tax fraud, but I assure you he won’t be the last.

Yo! –> Need more info on the $8000 first time homebuyer tax credit?

Photo Credit: abardwell on Flickr. Creative Commons License.

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