Irs Keeps Close Check On Tax Credit Applicants

Screening For Bogus Claims Leads To Criminal Probes Around The Nation

In the plea agreement, Price admitted following a similar pattern for 14 other tax returns - fraudulently claiming the credit and then siphoning off part of the refunds.

Terry Lemons, a spokesman for the IRS, declined to discuss the ongoing criminal investigations of taxpayers claiming the home buyer credit. He did say the investigations involve individuals as well as tax-return preparers.

Lemons said that "we don't want to discourage people from taking advantage of the credit," but the IRS also wants taxpayers to be certain that they've read through the eligibility rules so they don't end up with audits, back taxes and late penalties. Among the key qualification requirements that can snag unwary buyers:

* You won't qualify for the credit if you purchase your house from a "related person." That ranges from immediate family members - a spouse, parents, children, grandparents, grandchildren - to a corporation or partnership in which you have more than a 50 percent ownership stake.

* You are eligible individually, but your spouse, who co-purchased the house with you, is not.

* The house you are claiming was acquired through an inheritance or a gift.