Chairman Lewis' Opening Statement -- Hearing On First-Time Homebuyer Tax Credit

Statement

The Ways and Means Oversight Subcommittee held a hearing today to examine the administration of the first-time homebuyer tax credit. Subcommittee Chairman John Lewis (D-GA) issued the following opening statement:
"Today, the Subcommittee will examine the first-time homebuyer credit. We need answers to two basic questions. Are people claiming the credit who should not? What can be done to stop this abuse?

"The tax credit was created to stimulate the economy and home sales. It was estimated that at least 2.2 million households would claim about $18 billion of tax credits. To date, about 1.4 million households have claimed nearly $10 billion. The majority of these households-60 percent of them-have incomes below $50,000.

"To ensure the credit achieved its goals, the Internal Revenue Service developed a program to timely process returns, and issue refunds, for those claiming the credit. I salute this effort.

"I am mindful, however, that this quick response came at a cost. The Service processed over one million returns claiming the credit before new fraud filters were in place. The result, so far, is that more than 100,000 exams have been opened involving the credit.

"We will hear today that taxpayers claiming the credit include those: who already owned a home, who had not yet bought a home, and who are children-some as young as four years old. There are possibly hundreds of millions of dollars that have been paid to taxpayers who are not entitled to the credit. We want to, and we need to, stop this fraud and abuse. I look forward to the recommendations of our witnesses.

"At this time, I would like to take a moment to thank the Deputy Commissioner Linda Stiff, previously Acting Commissioner, for her outstanding service as a public official. I understand that you plan to retire in December after 30 years with the Service, and this is your last appearance before the Subcommittee. We have enjoyed working with you over the years, and your retirement will be a great loss. It goes without saying that you will be missed. We wish you the best.

"Thank you."

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