Tax cheats got $1.4 billion in taxpayer stimulus loans

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6/27/12, "Tax cheats got $1.4 billion in stimulus loans," Washington Times, Dinan

"Tax cheats were given $1.4 billion in government-backed mortgage loans under President Obama’s economic stimulus, and the government doled out at least an additional $27 million in tax credits to delinquents who took the first-time-homebuyer tax break, according to a government audit released Wednesday.

Under government rules, delinquent taxpayers are supposed to be ineligible for the mortgage insurance program unless they have reached a repayment agreement with the Internal Revenue Service. But the Federal Housing Administration didn’t have the right controls to weed out bad applications, said the Government Accountability Office, Congress‘ chief investigative arm.

That meant FHA insured $1.4 billion in mortgages for 6,327 borrowers who collectively owed $77.6 million in unpaid taxes, or an average of more than $12,000 each....

The report was the GAO’s second study looking at tax cheats and the stimulus.

In the first report, GAO said thousands of contracts and grants were paid out under the American Recovery and Reinvestment Act

• to those with unpaid tax bills."...
  

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