IRS paid $513M in unqualified homebuyer tax credits

[excerpt] Most of the money — about $326 million — went to more than 47,000 taxpayers who didn't qualify as first-time homebuyers because there was evidence they had already owned homes, said the report by J. Russell George, the Treasury inspector general for tax administration. Other credits went to prison inmates, taxpayers who bought homes before the credit was enacted and people who did not actually buy homes.

In all, the agency's enforcement efforts saved more than $1.3 billion and identified more than 200 criminal schemes, according to an IRS spokeswoman. But, not before wasting a half billion dollars.