As is the case with most people, the IRS and I don't get along too well. Now don't get me wrong, I have great respect for IRS employees, and I know the Service itself doesn't determine how much taxes they should "squeeze from a turnip." I am well aware who is responsible for those figures, although those people point their fingers at others when playing the blame game.
It's just that the IRS and I seem to disagree every year on whether I qualify for certain credits. I send in my completed form. And every year, the IRS sends me a letter saying I may qualify for a certain credit that I didn't claim, and please fill out the appropriate forms and return to them.
I appreciate them looking out for my best interest, but I filled out those forms when I initially filed my taxes. When I saw that I didn't qualify for the credit, I didn't send them in. The problem is, all this paperwork takes a long time and delays my refund. In fact, I now have two refunds out there in "paperwork land" somewhere.
So, when I read an Associated Press story last week that revealed 1,295 prison inmates had wrongly received $9 million in homebuyer tax credits, I was totally flabbergasted. Some of those inmates were legitimately filing jointly with their spouse, but several hundred of them (the exact number varied in several stories, and the actual report was too long for me to handle) not only didn't file jointly, but they were serving life sentences. Their "home" is prison.
IRS management said the money should be recovered, but didn't give specifics on how that would take place. I mean, what are they going to do -- threaten the violators with imprisonment?
The interesting aspect is that 174 of those "single-filing lifers" taxes were filed by paid, professional tax preparers. So there goes my theory that if I had paid a professional to do my taxes, my bank account would be overflowing with refunds right now. Or, I guess I would have my refund. But if it was filed wrongly, then the IRS really could threaten me with imprisonment if I didn't pay it back.
As it turns out, prison inmates were not the only fraudulent filers. In fact, more than 14,000 taxpayers wrongly received credits totaling $26 million. The report revealed five addresses claimed by 256 people. And I thought my house was crowded.
In one of the stories I read, it was reported that more than 80 IRS employees claimed the credit, even though they hadn't bought a house in the required time period. I wish I could see that list. Maybe one of them is holding onto my refunds.