WASHINGTON – Tens of thousands of people may have taken advantage of the first-time home buyer tax credit to defraud the government, an IRS watchdog office said Thursday, in testimony that could jeopardize efforts to extend the popular program.
Treasury Inspector General for Tax Administration J. Russell George told a House panel that more than 19,000 people filed 2008 tax returns or amended returns claiming the credit for homes they had not yet purchased. Those claims amounted to $139 million and it was not clear that the IRS planned to go back to verify that those purchases actually took place, he said.
George said his office had identified another $500 million in claims, by some 74,000 taxpayers, where there were indications of prior home ownership.
George's office said the IRS did not require taxpayers to provide documentation to substantiate the purchase of a home. They were told by the tax agency that it did not have the ability to accept such documentation electronically.
He told a House Ways and Means oversight subcommittee that they also found 580 taxpayers under the age of 18 who claimed $4 million in first-time home buyer credit. One was 4 years old.
George said that while the IRS has since taken steps to tighten oversight, "some key controls were missing to prevent an individual from erroneously or fraudulently claiming the credit."
Rep. John Lewis, D-Ga., chairman of the subcommittee, said he was concerned that the quick IRS response to the new credit came at a cost. "There are possibly hundreds of millions of dollars that have been paid to taxpayers who are not entitled to the credit," he said.
The top Republican on the panel, Rep. Charles Boustany, Jr., of Louisiana, said that while the issue of extending the credit was not the purpose of the hearing, "every time Congress creates a new refundable credit ... the incentive for fraud is magnified."
Linda Stiff, IRS' deputy commissioner for services and enforcement, agreed that "any time that there is an opportunity to receive cash back it tends to attract people that might have an intent to defraud the government." The agency "recognizes that there is potential for both fraud and errors" when a new tax credit is enacted. She said the agency "will vigorously pursue those who filed fraudulent claims."
The home buyer credit was a key element of the $787 billion stimulus package enacted last February. Under the measure, low- and middle-income first-time home buyers purchasing a home between Jan. 1 and Nov. 30 of this year could claim a credit of up to $8,000 on their 2008 or 2009 income tax return.
The Internal Revenue Service says it has processed claims from more than 1.5 million individuals or families. The General Accountability Office, in a report to the subcommittee, said that represented about $10 billion in tax revenue.
With the program scheduled to expire in a month and the housing market's recovery still shaky, there have been various proposals in Congress to extend and expand it.
At one end, House Majority Leader Steny Hoyer, D-Md., says the program should be extended for a month while lawmakers take another look at how it is being run. On the other end, Sen. Johnny Isakson, R-Ga., with the backing of banking committee chairman Christopher Dodd, D-Conn., wants to extend it through next June 30, and expand it to include all home buyers, at an estimated cost of $16.7 billion.
Housing and Human Development Secretary Shaun Donovan, in testimony to Congress earlier this week, was noncommittal, saying the administration understands the urgency of the housing situation but wants to get a better grasp of the costs involved.
As of the end of September the IRS, according to the GAO report, has frozen more than 110,000 refunds pending civil or criminal examinations, identified 167 criminal schemes and commenced 115 criminal investigations.
George said the IRS has implemented computer programming to reject claims from people who have not yet purchased a new home. He also acknowledged that the agency has installed filters to catch claimants who had entered information on tax returns indicating they may have owned a home in the three previous years. Those could include deductions for home mortgage interest or real estate taxes.
George also noted that through late July his office had identified some 3,200 taxpayers claiming credits totaling more than $20.8 million on tax returns filed with Individual Taxpayer Identification Numbers, an identifier that is used mainly by resident immigrants and does not indicate whether an individual is authorized to live or work in the U.S. The stimulus act specifically denies the credit to nonresident immigrants.
Stiff stressed that those claims flagged as potentially erroneous may be found, on further examination, to be legitimate.

While the program has widespread support in Congress, there are growing concerns about the costs. The cause, said Sen. Jack Reed, D-R.I., "is a worthy one." But "I hope we can find ways to pay for it."

Critics have also characterized the program as a subsidy for people who would have bought a new home regardless of the tax credit. The National Association of Realtors has estimated that one-fourth of those who have claimed the credit, about 350,000, would not have purchased their homes without the credit.

BOSTON – The Boston Celtics have waived forward Mike Sweetney.
The release on Thursday of Sweetney, the ninth pick of the 2004 NBA draft out of Georgetown, was expected with the Celtics having a deep roster. Sweetney was out of the NBA last season after spending his first two seasons with the New York Knicks and the next two with the Chicago Bulls.
The 6-foot-8 Sweetney, 26, signed with Boston as a free agent on Sept. 28 and averaged 3.6 points, 1.2 rebounds and 6.4 minutes in five exhibition games.

WASHINGTON – Americans seem to be cooling toward global warming. Just 57 percent think there is solid evidence the world is getting warmer, down 20 points in just three years, a new poll says. And the share of people who believe pollution caused by humans is causing temperatures to rise has also taken a dip, even as the U.S. and world forums gear up for possible action against climate change.
In a poll of 1,500 adults by the Pew Research Center for the People & the Press, released Thursday, the number of people saying there is strong scientific evidence that the Earth has gotten warmer over the past few decades is down from 71 percent in April of last year and from 77 percent when Pew started asking the question in 2006. The number of people who see the situation as a serious problem also has declined.
The steepest drop has occurred during the past year, as Congress and the Obama administration have taken steps to control heat-trapping emissions for the first time and international negotiations for a new treaty to slow global warming have been under way. At the same time, there has been mounting scientific evidence of climate change — from melting ice caps to the world's oceans hitting the highest monthly recorded temperatures this summer.
The poll was released a day after 18 scientific organizations wrote Congress to reaffirm the consensus behind global warming. A federal government report Thursday found that global warming is upsetting the Arctic's thermostat.
Only about a third, or 36 percent of the respondents, feel that human activities — such as pollution from power plants, factories and automobiles — are behind a temperature increase. That's down from 47 percent from 2006 through last year's poll.
"The priority that people give to pollution and environmental concerns and a whole host of other issues is down because of the economy and because of the focus on other things," suggested Andrew Kohut, the director of the research center, which conducted the poll from Sept. 30 to Oct. 4. "When the focus is on other things, people forget and see these issues as less grave."
Andrew Weaver, a professor of climate analysis at the University of Victoria in British Columbia, said politics could be drowning out scientific awareness.
"It's a combination of poor communication by scientists, a lousy summer in the Eastern United States, people mixing up weather and climate and a full-court press by public relations firms and lobby groups trying to instill a sense of uncertainty and confusion in the public," he said.
Political breakdowns in the survey underscore how tough it could be to enact a law limiting pollution emissions blamed for warming. While three-quarters of Democrats believe the evidence of a warming planet is solid, and nearly half believe the problem is serious, far fewer conservative and moderate Democrats see the problem as grave. Fifty-seven percent of Republicans say there is no solid evidence of global warming, up from 31 percent in early 2007.
Though there are exceptions, the vast majority of scientists agree that global warming is occurring and that the primary cause is a buildup of greenhouse gases in the atmosphere from the burning of fossil fuels, such as oil and coal.
Jane Lubchenco, head the National Oceanic and Atmospheric Administration, told a business group meeting at the White House Thursday: "The science is pretty clear that the climate challenge before us is very real. We're already seeing impacts of climate change in our own backyards."
Despite misgivings about the science, half the respondents still say they support limits on greenhouse gases, even if they could lead to higher energy prices. And a majority — 56 percent — feel the United States should join other countries in setting standards to address global climate change.
But many of the supporters of reducing pollution have heard little to nothing about cap-and-trade, the main mechanism for reducing greenhouse gases favored by the White House and central to legislation passed by the House and a bill the Senate will take up next week.
Under cap-and-trade, a price is put on each ton of pollution, and businesses can buy and sell permits to meet emissions limits.
"Perhaps the most interesting finding in this poll ... is that the more Americans learn about cap-and-trade, the more they oppose cap-and-trade," said Sen. James Inhofe, R-Okla., who opposes the Senate bill and has questioned global warming science.
Regional as well as political differences were detected in the polling.
People living in the Midwest and mountainous areas of the West are far less likely to view global warming as a serious problem and to support limits on greenhouse gases than those in the Northeast and on the West Coast. Both the House and Senate bills have been drafted by Democratic lawmakers from Massachusetts and California.
One of those lawmakers, Sen. Barbara Boxer of California, told reporters Thursday that she was happy with the results, given the interests and industry groups fighting the bill.

"Today, to get 57 percent saying that the climate is warming is good, because today everybody is grumpy about everything," Boxer said. "Science will win the day in America. Science always wins the day."

Earlier polls, from different organizations, have not detected a growing skepticism about the science behind global warming.

Since 1997, the percentage of Americans that believe the Earth is heating up has remained constant — at around 80 percent — in polling done by Jon Krosnick of Stanford University. Krosnick, who has been conducting surveys on attitudes about global warming since 1993, was surprised by the Pew results.

He described the decline in the Pew results as "implausible," saying there is nothing that could have caused it.

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Associated Press Writers Seth Borenstein and Kevin Freking contributed to this report.

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On the Net:

The Pew Research Center for the People & the Press: http://www.people-press.org

GENEVA – The U.N. Human Rights Council voted Friday to endorse a Gaza war crimes report and send it to the Security Council, possibly setting up international prosecution of Israelis and Palestinians accused of war crimes.
The council approved a Palestinian-backed resolution after two days of debate on the Goldstone report, which it had commissioned following the Dec. 27-Jan. 18 conflict in which almost 1,400 Palestinians and 13 Israelis were killed.
The resolution passed 25-6, with mostly developing countries in favor and the United States and five European countries — Hungary, Italy, Netherlands, Slovakia and Ukraine _opposing.
Eleven mostly European and African countries abstained, while Britain, France and three other members of the 47-nation body declined to vote. Russia and China, two permanent members of the U.N. Security Council, were among those voting yes.
"The clock on the report starts now," said Ibrahim Khraishi, the Palestinian Authority's U.N. ambassador in Geneva, adding that he hoped the Security Council in New York would take up the report.
If the report is considered by the 15-member Security Council, the U.S. is likely to use its veto to block any call for getting the International Criminal Court involved in the dispute over Gaza or taking action against Israel.
The 575-page report, compiled by an expert group led by Judge Richard Goldstone, concluded that Israel used disproportionate force, deliberately targeted civilians, used Palestinians as human shields and destroyed civilian infrastructure during its incursion into the Gaza Strip to root out Palestinian rocket squads.
It also accused Palestinian armed groups including Hamas of deliberately targeting civilians and trying to spread terror through rocket attacks on southern Israel.
In Ramallah, a spokesman for Palestinian President Mahmoud Abbas, welcomed Friday's vote.
"What is important now is to translate words into deeds in order to protect our people in the future from any new aggression," Nabil Abu Rdeneh said.
Israel and the U.S. called the Goldstone report "flawed" because it ignored Israel's right to defend its people from Palestinian rocket fire. They warned that the vote could jeopardize Middle East peace prospects.
Israel's foreign minister, Avigdor Lieberman, also said endorsing the report could have far-reaching consequences.
"Whoever votes in favor of endorsing the report must understand that next time it will be the soldiers and officers of NATO in Afghanistan, and then Russian soldiers and officers in Chechnya," Lieberman said late Thursday.
U.S. diplomat Douglas M. Griffiths told the council that Washington was disappointed with the outcome of the vote.
"We're focused on moving forward in the peace process and we feel that this is a distraction from that," Griffiths told The Associated Press.
The resolution — which also condemns recent Israeli actions in the Palestinian territories and East Jerusalem — endorses the report's recommendation that both sides in the conflict should show the Security Council within six months that they are carrying out credible investigations into alleged Gaza abuses. If they are not, the matter should then be referred to prosecutors at the International Criminal Court in The Hague, Netherlands.
ICC prosecutor Luis Moreno Ocampo had no comment Friday on a possible war crimes probe into the Gaza conflict.
Prosecutors are analyzing a declaration in January in which the Palestinian Authority accepted the court's authority over territory it controls — something only sovereign nations are allowed to do.

Palestinians filed their recognition in the hope that if the court accepts it, Moreno Ocampo would then have jurisdiction to launch an investigation into war crimes committed by both sides during the Gaza conflict even without an order from the Security Council.

Israel does not accept the court's jurisdiction.

The U.N. High Commissioner for Human Rights, Navi Pillay, urged both sides earlier this week "to carry out impartial, independent, prompt and effective investigations into reported violations of human rights and humanitarian law."

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Associated Press Writer Mike Corder in The Hague and Aron Heller in Jerusalem contributed to this report.