07/03/12 Money For Tax Cheats


Under the 2009 Stimulus Act, the Federal Housing Administration insured $20 billion in mortgages for 87,000 homeowners.

Among these recipients were 6,300 borrowers who received almost $1.5 billion in mortgages. However, these borrowers owed the government millions in taxes. Nearly $78 million. [For more information see Government Accountability Office report GAO-12-592 (here).]

More than half of these tax cheats — over 3,800 — claimed and received $27.4 million in Recovery Act First-Time Homebuyer Credits worth up to $8,000 each. This is a refundable tax credit. This means they would actually be paid that amount if they had no tax liability. In one third of the cases examined, the recipients actually got the $8,000.

There’s more. Almost one-third of the tax delinquents had mortgages rated as “seriously delinquent.” More than twice the rate of those who paid their taxes. And tax cheats were nearly three times as likely to have their property foreclosed.

The stimulus act has already cost U.S. taxpayers $825 billion. The irony is too rich. Those who pay their taxes are also funding cash payments to those owe the IRS.

By the way, this is all about people who pay or at least owe taxes. One half of all Americans have no federal income tax liability. A wealth redistribution program has already been implemented in America.