Inmates Got $9.1M in 'Homebuyer' Tax Credits IRS working to recoup money By Kevin Spak, Newser Staff Posted Jun 23, 2010 12:23 PM CDT 40 comments Comments President Obama gave over a thousand inmates a reason to be cheerful. Or at least temporarily less miserable. (Shutterstock) (Newser) – Almost 1,300 prisoners, including 241 serving life sentences, filed for the Obama administration’s First Time Homebuyer Credit on their taxes, claiming they’d bought homes while incarcerated, according to a Treasury Department report released today. The IRS paid out $9.1 million on those claims, money it now says it’s trying to recoup. “A very small number of payments were made to prisoners incorrectly,” it tells the Washington Independent. “The IRS will follow up on every instance of improper prisoner payment.” That’s not the only fraud highlighted in the report, either. Some 2,555 claimed the credit for homes bought prior to the start of the program, and 10,000 filed for homes that were also claimed by someone else. One house was cited on 67 different tax returns. There were also 34 IRS employees who claimed the credit even though they already owned a home.