FTHB Tax Credit Popular With Congress Despite IRS Reports Of Potential Fraud

According to a recent IRS testimony, tens of thousands of people may have taken advantage of the First-Time Homebuyer Tax Credit; potentially defrauding the government. As of the end of September, the IRS has reportedly frozen more than 110,000 refunds pending civil or criminal examinations.

Key points in proposals to extend the First-Time Homebuyer Tax Credit (set to expire in on Nov. 30th include

1. Program to be extended for one (1) month while lawmakers examine how the program is being run

2. Program is to be extended through June 30 of 2010 and expanded to include all home buyers - estimated costs approximately $16.7 billion

While the First-Time Homebuyer Tax Credit enjoys widespread support in Congress, issues of cost and potential abuse cloud prospects of extension of the deadline. The NAR (National Association of Realtors) has estimated that one-fourth of homebuyers that have claimed the credit would not have purchased their homes without the credit. This estimate is not likely to go unnoticed in Congressional debate