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Fraud? You mean 'confidence'!

October 22, 2009

So the first time homebuyer credit is riddled with fraud. TaxGrrrl reports:

The IRS announced earlier this week that it is investigating more than 100,000 “doubtful claims” related to the credit. In fact, to date, the IRS has instigated 107,000 civil claims related to the credit – about 8% of the taxpayers who’ve applied for the credit. A quick turn of the math shows that to be up to $800 million in potentially false credit.

So naturally Chris Dodd (D, Countrywide) thinks we should do more of this:

Critics have said the current credit is a costly way to spur a relatively small number of sales.

Dodd acknowledges the criticism but thinks there’s more than dollars and cents at stake.

"There’s a multiplier that I can’t put a price on, and it’s confidence," he said. "And I think we’re getting close to people feeling that sense of confidence and optimism again."

It's a confidence game, for sure.