According to a recent Treasury Department report, prisoners received nearly $10 million in tax credits intended for first-time homebuyers. Nearly 1,300 prisoners received the $8,000 credit; 241 of these prisoners are serving life sentences.
As you may remember, in order to be eligible for the $8,000 tax credit, the homebuyer must be purchasing a "primary residence." Translation: a person needs to actually live in the house after purchasing it. This definition should make it pretty difficult for a person stuck in the "Big House" to buy another house. Difficult yes, but not impossible.
So how on earth were the prisoners able to receive the tax credit?
Well, J. Russell George, the Treasury inspector general for tax administration, explained it this way, "Unfortunately, they have a lot of time on their hands, and so this is how they've elected to use that time."
Yes, apparently plenty of time to con the government out of tens of millions of dollars. As NPR reported, George also mentioned that prisoners could buy a house and if they had a spouse on the outside, the couple could have even qualified for the credit. George and his investigators took this into account and still came up with the $9.1 million in fraudulent claims.
When the IRS was asked about these claims, the tax-collecting agency deflected the blame by claiming that it doesn't have up-to-date records of prisoners. As a result, the IRS can't be expected to tell the difference between a prisoner and a regular, law-abiding taxpayer. Congress does not currently require prisons to give their records to the IRS.
Even with that being the case, the IRS should still not get off so easily. Since these people are in prison, they must not be that good at escaping the law. The IRS should not rest until it recovers every penny wasted on these fraudulent claims.