Jailbird Tax Credit

            Since when do folks presently lodged at the metal bar hotel qualify for (and receive) what the government is handing out in the form of the “first time homebuyer tax credit?”

            You see, it’s not just you, or your kids, or your friends and neighbors who Uncle Sam seems to be in a hurry to accommodate with this tax credit – seems nearly 1,300 prison inmates (that’s right – 1,300 jailbirds) have wrongly received more than $9 million of your tax dollars in the form of this credit.  And if that isn’t enough, 241 of these blokes were lifers who it would appear, already have secured a home long ago!

            According to stats recently released by J. Russell George, Treasury Inspector General for Tax Administration, more than 14,100 taxpayers have wrongly received at least $26.7 in tax credits originally intended, so Obama proclaims, to help lift the country’s horrible housing markets.  So there.

            “This is very troubling,” quoth George, in what might only be referred to as the understatement of the year.  “Congress created and modified the homebuyer credit to stimulate the economy and help taxpayers achieve the American dream, not to line the pockets of wrongdoers.”

            Take comfort in the notion, however, that “A very small number of payments were made to prisoners incorrectly, which the IRS is now taking all steps to recapture and to prevent going forward,” notes George.

            Don’t you feel so much better.

            And if you’re not a jailbird, but just an ordinary Joe Sixpack kind of chap, get a load of House Majority Leader Steny Hoyer’s (D-Md) surmise, last week, that tax increases will “eventually” be necessary to address the nation’s increasing debt burden.

            “As the House and Senate debate what to do with the expiring Bush tax cuts in the coming weeks, we need to have a serious discussion about their implications for our fiscal outlook, including whether we can afford to permanently extend them before we have a real plan for long-term deficit reduction….Raising revenue is part of the deficit solution, too.”

            But if you’re a “millionaire” and living in New Jersey, you are probably clapping for at least one of your politicians.  It was also reported last week that Democrats in the New Jersey Assembly failed to override the Republican governor’s veto of a tax surcharge on millionaires.  We hear the “one year surcharge” (like there has ever been a temporary tax measure?) would have raised about $600 million by increasing income taxes nearly 2% on the state’s highest 16,000 income earners.  Let’s hear it for Guv Christie!

CONSULT YOUR TAX ADVISOR – This article contains general information about various tax matters.  You should consult your CPA regarding the implications to your own particular situation.

            Jeff Quinn, the author of this article, is a shareholder in Ashley Quinn, CPAs and Consultants, Ltd., with offices in Incline Village and Reno.  He is also a contributor to the recently published 13th edition of Tax Savvy for Small Business, published by Nolo.  He can be reached at 831-7288, and welcomes comments below.

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