Kevin Randall, a sophomore at the University of Notre Dame, has signed on as a guest columnist for Finding Benjamin. If you’re unfamiliar with the first-time home buyer tax credit, check out Chris’s story all about his own home buying experience!

What are you waiting for?  If you’re a prospective first-time homeowner, buy that house you’ve been eyeing up NOW.  Although Congress has been debating extending the first-time home buyer’s tax credit beyond its current December 1^st end date, a recent report by the inspector general makes that extension seem less likely.

Federal reports released last Thursday have pointed out rampant fraud in the beloved tax credit program, costing hundreds of millions. Treasury Inspector General for Tax Administration J. Russell George said his office has located at least $500 million in fraudulent claims – claims made by “first time home buyers” who were not in fact first time home buyers.  Another 19,000 fraudulent taxpayers claimed the credit on homes that they had not even purchased.

Most interesting, the report also listed more than 500 cases in which the home buyer was not yet 18.  One first time home buyer was 4 years old – apparently he’d had enough of his crib and opted for his own bachelor pad.

Humorous anecdotes aside, the staggering reports of fraud combined with the heavy cost will likely discourage an extension of the program past December 1^st.  To date, 1.4 million tax returns taking advantage of the first time home buyer credit have been filed, costing upwards of $10 billion.

Senate Majority Leader Harry Reid supports extending the program, but the cost is prohibitive.  Simply extending the current program would cost about $1 billion each month, but another proposal is even more expensive.  Some lawmakers want to extend the program to all home buyers – even toddlers – as well as double the maximum possible credit to a cool $16,000.  This could potentially cost $2.4 billion each month, a huge amount considering many economists believe most potential home buyers would still purchase homes even without a tax credit.

The moral of the story?  Make sure you’re eligible for the tax credit… and hurry up.  Head over to the National Association of Home Builders to see if you’re eligible and also how many bones Uncle Sam will toss your way for your first home purchase (most home buyers receive less than $8,000).  After doing some homework, begin your search, but keep in mind you will probably only have until December to take advantage of the tax credit.

25 year old Van T. Dinh has been busted not once, but twice for his hacking and identity theft activities. When he was 19, Dinh created a computer virus that posed as a stock-trading tool, which he used to steal another investor’s login information to a brokerage account. He then used that account to buy worthless stock options from himself at a value of $47,000. He was caught, but apparently 13 months of jail time and 3 years of supervised release were not enough to get him to mend his ways.

Just recently Dinh hacked into a currency exchange service and attempted to add $110,000 into his account. He was caught again, and after being held without bail for “being a danger to the community by hacking activities”, has plead guilty to computer fraud and identity theft in federal court.

This guy may have had the brains to be able to hack into the programs, but he obviously wasn’t smart enough to keep from getting caught, or to learn his lesson the first time around. If you’re good with computers, there are many productive (and legal!) ways to earn a living, but this definitely isn’t one of them.

Photo credit : zakwitnij

By Staff

That’s right folks, I said Ponz, not Fonz. Just like Henry Winkler’s character on Happy Days, Ponzi schemes should not be messed with. Just ask Bernie Madoff… He’s facing 150 years in the slammer for his shenanigans.

For those of you who are not familiar with Ponzi schemes, check out Wikipedia.

Bernie Madoff is not alone in this practice. According to BBB, there are numerous smaller scale pyramid and Ponzi schemes all over the internet, most notably on YouTube. There are thousands of these cash gifting videos out there, and they all promise people that they will make money easily. All of these programs are based off of multiple people signing up, and whatever they paid to sign up is just passed along to others that signed up previously. In the long run, many people end up getting screwed over, so don’t let it happen to you.