THE HELP DESK The Help Desk: Top Tips

Homebuyer tax credit fraud

Don't be a victim of first time homebuyer tax credit fraud. In the first case nationwide, the IRS has just indicted a tax preparer for fraud involving this credit.

EMAIL  |   PRINT  |   SHARE  |   RSS
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all RSS FEEDS (close)
By Gerri Willis, CNN personal finance editor

For more information on managing your largest investment, check out Gerri Willis' 'Home Rich,' now in bookstores.

NEW YORK ( -- The IRS is on the lookout for taxpayers and tax preparers skirting eligibility rules when claiming the $8,000 tax credit. Here's what you need to know.

1. Get the story

The IRS just prosecuted a tax preparer in Jacksonville, Florida for falsely claiming the $8,000 first time homebuyer tax credit for a client's tax return. His clients either didn't buy a home or they didn't qualify for the credit.

And this isn't the only case. There are about 24 criminal investigations still pending. The agency says it has screening tools in place that can detect fraud.

The penalties can be steep if you're caught: up to three years jail time and/or up to $250,000 in fines.

Even if you use a tax preparer, YOU are ultimately responsible for the accuracy of the tax return. If there is an error, you may be responsible for paying back taxes, penalties and interest.

2. Protect yourself

Here's how you can protect yourself: first, use a reputable tax preparer. The sad truth is that anybody can put out a shingle and claim to be a tax preparer.

To be safe, you'll want to pick a certified public accountant or an enrolled agent (a professional licensed by the federal government). You can find out whether your CPA has had any recent disciplinary actions against him or her by going to the AICPA's Web site, where there is also info about picking a tax professional. Don't automatically trust a tax preparer who promises you a big refund.

Finally, make sure your refund comes directly to you.

3. Know the facts

The First-Time Homebuyer Credit provides up to $8,000 for first-time homebuyers.

And remember, it's a credit -- not a tax deduction.

To qualify you have to be a first-time homebuyer --so you cannot have owned a primary home in the past three years.

And you must close before December 1st of this year.

Go to for more info.

-- CNN's Jen Haley contributed to this article.

Got a financial dilemma? Go to to submit questions, read the Help Desk articles and check out new Help Desk videos. And tune in to CNN's Newsroom Tuesdays and Fridays, when Gerri Willis and other experts answer your questions. To top of page

They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
10 of the most luxurious airline amenity kits When it comes to in-flight pampering, the amenity kits offered by these 10 airlines are the ultimate in luxury More
7 startups that want to improve your mental health From a text therapy platform to apps that push you reminders to breathe, these self-care startups offer help on a daily basis or in times of need. More
5 radical technologies that will change how you get to work From Uber's flying cars to the Hyperloop, these are some of the neatest transportation concepts in the works today. More
Worry about the hackers you don't know 
Crime syndicates and government organizations pose a much greater cyber threat than renegade hacker groups like Anonymous. Play
GE CEO: Bringing jobs back to the U.S. 
Jeff Immelt says the U.S. is a cost competitive market for advanced manufacturing and that GE is bringing jobs back from Mexico. Play
Hamster wheel and wedgie-powered transit 
Red Bull Creation challenges hackers and engineers to invent new modes of transportation. Play

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.