An audit of refunds to taxpayers claiming the federal homebuyer tax credit concludes that although the IRS has made "significant strides" in detecting erroneous claims, millions of dollars have been paid out to prison inmates and for transactions involving homes purchased before the credit took effect.The report, by the Treasury Inspector General for Tax Administration (TIGTA), identified 14,132 erroneous credits totaling at least $26.7 million -- a tiny sliver of the more than $12.6 billion in refunds paid to date, but a troubling indication that the program remains vulnerable to fraud.The erroneous refunds included $17.6 million in credits allowed for 2,555 taxpayers who appear to have purchased their homes before the tax credit first took effect in April 2008, and $9.1 million in credits to 1,295 prisoners who were incarcerated at the time they reported purchasing their home.The report also estimated "tens of millions of dollars" in credits were issued to 10,282 ...
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