U.S. Rep. Bill Pascrell, Jr. (D-NJ-8) today joined his colleagues on the House Ways and Means Committee's Oversight Subcommittee in vetting the administration of the First-Time Homebuyers Tax Credit. In response to the hearing findings, Pascrell has cosponsored legislation to increase the Internal Revenue Service's authority over the program and ensure proper use of a program which has helped over 30,000 New Jerseyans purchase a new home.
"It is our responsibility to weigh the value of this credit in the face of fraud and abuse," said Pascrell, during the subcommittee hearing. "It is also our duty to help stimulate the housing marketplace, while protecting Americans from unnecessary loss of federal revenue."
In response to the house crisis of 2007 and 2008, the American Reinvestment and Recovery Act provided an $8,000 first-time homebuyer credit in connection with a home purchased before Dec. 1, 2009. The credit has provided tax benefits to 1.4 million families in the United States.
After Treasury Inspector General for Tax Administration J. Russell George testified before the subcommittee that people under the age of 18 had illegally received the tax credit, Rep. Pascrell co-sponsored legislation that would give the IRS more authority in qualifying applicants' eligibility for the benefit.
The Homebuyer Tax Credit Improvement Act, which was introduced by Oversight Subcommittee Chairman Rep. John Lewis (D-GA), would improve administration of the credit and prevent abuse by:
Requiring a minimum age of 18 to claim the credit
Requiring that taxpayers attach a copy of documentation to prove that they purchased a home
Providing IRS with authority to look at prior year returns and determine if a taxpayer is eligible for the credit
Improving tax administration by increasing the number of electronic returns filed by return preparers
The Treasury Inspector General for Tax Administration, the U.S. General Accountability, and the IRS are in agreement that additional tools are needed to better administer this credit.