U.S. Court Shuts Down Georgia Tax Preparation Firms Allegedly Involved in Fuel Credit Tax Scam

/PRNewswire / -- A federal court in Savannah, Ga., today permanently barred Ophelia Kelley, of Vidalia, Ga., from preparing federal income tax returns for others, the Justice Department announced today. According to the government complaint, Kelley operated two return preparation firms in Vidalia - Kelley Tax Service and City and Country Girl Tax Service. Kelley agreed to the civil injunction order.

The civil injunction suit alleged that Kelley and her businesses repeatedly and intentionally engaged in fraudulent conduct by claiming improper deductions and tax credits for customers. Kelley allegedly claimed bogus fuel tax credits for customers who were not entitled to the credit. The fuel credit is available only to taxpayers who operate farm equipment or off-highway business vehicles. It is not available for vehicles driven on roads or highways.

The complaint alleged that Kelley fraudulently claimed absurdly large credits for truck drivers by falsely reporting purchases of huge quantities of fuel, often more than the customer could have bought using all his annual income. Return preparer fraud and fuel credit scams are on this year's IRS list of the Dirty Dozen Tax Scams. In the past few years the Justice Department has obtained injunctions shutting down many tax preparers who claim the bogus credits on customers' returns.

According to the complaint, Kelley also fabricated false deductions for such things as medical expenses and charitable gifts. The suit also alleged that Kelley failed to sign at least 100 tax returns she prepared for customers. Paid tax preparers are required by law to sign all returns they prepare.

John DiCicco, Acting Assistant Attorney General for the Justice Department's Tax Division, thanked Grayson Hoffman, the Justice Department trial attorney who handled the case, and Shauna Henline, a senior technical advisor with the IRS's Small Business/Self Employed Division, who conducted the investigation.

In the past decade, the Justice Department's Tax Division has obtained more than 395 injunctions against tax fraud promoters and tax return preparers. Information about these cases is available on the Justice Department's Web site.

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Public Hearing Set on Georgia Conservation Tax Credit Program Rules

The Georgia Department of Natural Resources has scheduled a public hearing to solicit comment on proposed amendments to rules for the Georgia Conservation Tax Credit Program.

The hearing is set for 5:30-6:30 p.m. March 19 in the conference room at the Wildlife Resources Division’s Wildlife Resources Conservation Center, 2065 U.S. Highway 278 S.E., Social Circle, Ga. 30025. The Conservation Center is about four miles west of Rutledge and 1.5 miles northeast of the intersection of Interstate 20 and U.S. 278 (Exit 101).

The DNR is revising Rules 391-1-6-.01 through 391-1-6-.05 to address and incorporate changes made to the Conservation Tax Credit Program with the passage of House Bill 1274, which amended the conservation tax credit provided for in Code Section 48-7-29.12. The following changes were made by House Bill 1274 and are included in the rule revisions:

· Define fair market value by an appraisal that meets IRS requirements.

· Allow donations to the federal government to qualify.

· Allow bargain sales to qualify.

· Extend the carryover period from five to 10 years.

· Specify that partnerships are subject to a $1 million aggregate cap.

· Eligible conservation purposes will be defined by the department.

At the public hearing, anyone may present data, make a statement, comment or offer a viewpoint or argument either orally or in writing. Oral statements should be concise.

Written comments are also welcomed. To insure their inclusion in the department’s package for the Board of Natural Resources, written comments should be received by 5 p.m. April 10. Comments may be e-mailed to Kristina.Sorensen@dnr.state.ga.us or sent via regular mail addressed to: Kristina Sorensen, Conservation Tax Credit Program, 2065 U.S. Highway 278 S.E., Social Circle, Georgia 30025-4743.

Copies of the proposed Conservation Tax Credit Program rules are posted at http://glcp.ga.gov/ (select the “Georgia Tax Credits” tab) and www.georgiawildlife.com (click the “Conservation” tab). Written copies are available from Kristina Sorensen, Kristina.Sorensen@dnr.state.ga.us or by calling (770) 918-6411.

The proposed rules will be considered by the Board of Natural Resources at its meeting on April 29 in the DNR Board Room at 2 Martin Luther King Jr. Drive S.E., Suite 1252, East Tower, Atlanta, Ga. 30334. The meeting is open to the public.

The Georgia Conservation Tax Credit Program rules are proposed for adoption pursuant to authority contained in the Georgia Conservation Tax Credit Act (O.C.G.A. 48-7-29.12).

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House Bill Aims to Stabilize Housing, Addresses Foreclosure and Stimulus

A bill that embraces the need for righting the housing market --- the first big step toward economic recovery --- was introduced Friday in the U.S. House of Representatives.

H.R. 384, The TARP Reform and Accountability Act, was offered by Rep. Barney Frank (D-Mass.), chair of the House Financial Services Committee. The bill would require the Treasury Department to develop a program, outside the Troubled Asset Relief Program, to stimulate demand for home purchases and lower property inventories, by making affordable mortgages available for qualified buyers through interest rate buydowns, a priority of the National Association of Realtors.

The measure would amend the TARP provisions of the Emergency Economic Stabilization Act of 2008 to make significant steps to reduce foreclosures, strengthen accountability and close loopholes. Treasury could consider the impact of areas with the highest inventories of foreclosed properties.

NAR President Charles McMillan was heartened by the legislation that would move the housing market forward. "The bill proposed by Chairman Frank is an important first step toward launching a real estate recovery. Housing has always led this country out of economic downturns, and this bill recognizes that the key to bolstering the overall economy is creating stability in the real estate markets. With foreclosure relief, improving the Hope for Homeowners Plan, and expanding TARP to support commercial real estate loans and commercial mortgage-backed securities, this legislation will help create housing stability."

"By directing the Treasury Department to increase the availability of affordable mortgages rates for qualified home buyers and to offer reduced rate loans designed to stimulate demand for home purchases and clear inventory of properties, Chairman Frank has responded to the most critical issues facing potential homeowners," McMillan said.

Foreclosure relief, using the second half of the $700 billion previously authorized by Congress, would be conditioned on stipulation that $50 billion be used for foreclosure mitigation and calls for a plan to be put into action by March 15. That would allow the Treasury to begin committing the remaining TARP funds for the plan no later than April 1.

The plan would require that foreclosure assistance must apply only to owner-occupied residences. Further, the bill would provide liability protection for loan servicers who engage in loan modifications. Such servicers would have to report regularly to the Treasury.

In addition, the Treasury would be authorized to provide support for commercial real estate loans and commercial mortgage-backed securities, an NAR priority.

NAR has been urging the incoming Obama administration, as well as Congress, to address critical housing needs. "This legislation is a great beginning, but more needs to be done. We must continue to bring potential homebuyers into the market by ensuring low mortgage interest rates, making the higher 2008 conforming loan limits permanent, and applying the $7,500 tax credit to all homebuyers and making it non-repayable," McMillan said.

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Georgia Housing Leaders Call on Congress to Help Main Street

(BUSINESS WIRE)--The Georgia housing industry called on Congress January 7 to address the housing crisis that is at the root of the nation’s recession. Rick Porter, owner of Richport Properties, Inc.; Kenny King, president of Kingsland Corp.; and Kurt Cannon, owner of Rabun Builders, Inc. and the president of the Home Builders Association of Georgia, urged Congress to enact bold measures that will stimulate the housing market and, in turn, revive the local, state and national economies.

“Housing is central to our economy and is an engine of production that can lead us out of the recession,” said Porter. “But it is crucial for Congress to enact a major stimulus package to stop the decline in home values, stem the tide of foreclosures, stabilize financial markets and re-ignite consumer demand.”

To get the Georgia economy moving again, the housing industry is urging Congress to support enhancements to the home buyer tax credit and provide below-market, 30-year fixed-rate mortgages for home purchases.

Specifically, the legislation should include:

1. A 10 percent tax credit for all qualified home buyers capped at 3.5 percent of FHA, Freddie Mac or Fannie Mae loan limits (equaling $10,000 to $22,000 depending on geographic market). All primary home purchases through December 31, 2009, would be eligible. Repayment would be required only if the home was sold within three years. And the credit would be available at closing, making it easier for buyers to use it as a downpayment;

2. A below-market, 30-year fixed-rate mortgage for home purchases. The second component of the stimulus plan would provide qualified home buyers with 30-year fixed-rate mortgages at 2.99 percent interest on contracts closed until June 30, 2009 and 3.99 percent interest on closings between June 30 and December 31, 2009; and

3. Continued measures to reduce foreclosures and keep people in their homes.

The housing industry representatives cited a similar plan with both a tax credit and a mortgage rate subsidy that was enacted in 1975 when the nation was also in the midst of a recession. That successful stimulus plan jump-started the depressed economy, and the effects continued in communities across the country long after the measure expired.

“We’ve been in business for about 20 years, and we’re currently working on a project of 23 units which we began back in 2005,” explained Kenny King, president of Kingsland Corp., out of Snellville. “In all my years in home building, this project is probably our best product in our best location, but in this market, we can’t turn the units over. We sold three in 2007, and only four in 2008 – we’ve got 16 left and we don’t know how we’ll sell them. Consumer confidence is basically ‘zero.’ We need stability and confidence brought back to the housing market to end this extended recession.”

Kurt Cannon, owner of Rabun Builders, Inc., from Clayton, and the current president of the Home Builders Association of Georgia, builds second-home and retirement properties. “Our business is basically just shutting down. Last year we only did 25 percent of what we should have done, and now we are finishing up projects without any others lined up. Over the past three months, I’ve talked to between 70 and 80 builders around the area, and I keep hearing the same story over and over again. Builders with high credit ratings, with decades of good credit, current on their payments, are suddenly told by their banks that they have to pay off their loans in 10 days or the bank will foreclose. Of course, they end up foreclosing and the bank just ‘fire-sales’ the neighborhood. It’s the same story all around. We must stop the bleeding.”

“When the housing industry is in a crisis, the entire community is affected,” continued Porter. “Retailers, manufacturers, service providers and even the local government are affected. Most important, local residents suffer.”

“Three million home building-related jobs across the country have been lost as a result of the slowdown in housing production, which represents $145 billion in lost wages and $4.9 billion in lost purchases,” said National Association of Home Builders (NAHB) economist Bernard Markstein. “Deterioration in these jobs has now spilled over into virtually all sectors of the U.S. job market and the economies of states like Georgia.”

"We are leaving no stone unturned in our efforts to convince Congress to quickly enact a robust housing stimulus program. There’s no question that stopping the decline in home values and restoring demand for housing is the fastest and most effective way of reviving the economy," Porter said.

The housing leaders in Georgia are part of a new coalition called Fix Housing First, consisting of more than 600 organizations, home building companies and manufacturers advocating for this major stimulus package to stem the decline in home values, stabilize financial markets and re-ignite consumer demand. To learn more about Fix Housing First, go to www.fixhousingfirst.com.

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President Bush Signs Landmark Housing Bill into Law

RISMEDIA - Landmark housing legislation signed into law yesterday by President Bush is aimed at ending the current cyclical downturn in the housing industry, helping home buyers and strapped borrowers and strengthening the housing finance system, according to the National Association of Home Builders (NAHB).

“This milestone bill contains several provisions to get home buyers back into the marketplace, stop the slide in home prices, provide a lifeline to borrowers facing foreclosure, improve mortgage liquidity and bolster confidence in Fannie Mae and Freddie Mac,” said NAHB President Sandy Dunn, a home builder from Point Pleasant, W.Va. “We commend Congress and the President for taking this action to provide much-needed relief to the American people.”

For the past year, NAHB has been in the forefront in pushing for legislation to address the turmoil in the financial and housing markets and to bolster the nation’s faltering economy.

“By helping Americans avoid foreclosure, cracking down on predatory lending, protecting communities from the blight of abandoned homes, and providing generous tax incentives to encourage home ownership, this legislation will help strengthen the housing market and create jobs,” said Speaker Nancy Pelosi.

Senate Banking Committee Chairman Chris Dodd (D-Conn.), a chief architect of the bill, calls it “the most important piece of housing legislation in a generation.”

Prudential California/Nevada/Texas President Ed Krafchow agreed, saying the passing of the bill signifies an important turning point in the real estate industry.

“I think [the passing of the bill] is indicative of us coming through the storm,” Krafchow said. “The best part of this is, that this is a rebuilding process and now we’re on the other side of the perfect storm that hit the industry and certainly damaged the financial part of the business and greatly impeded doing real estate transactions. I’m not suggesting we’ve hit smooth sailing, but the majority of the storm is over and we’re starting to move forward in the business and the industry as it grows. That’s the most positive piece of the signing of this bill.”

Key elements of H.R. 3221, the Housing and Economic Recovery Act of 2008, include:

- A temporary first-time home buyer tax credit. The tax credit will stimulate home buying, reduce excess supply in housing markets and shore up home prices.

- FHA modernization and expansion. A revitalized FHA will have greater flexibility to respond to the needs of borrowers, enable more working families to become home owners and play an important role in the mortgage markets. To address the foreclosure crisis, the FHA is given additional authority to insure up to $300 billion of mortgages to refinance loans headed for foreclosure.

- GSE (government-sponsored enterprise) reform. The law reforms the regulation of Fannie Mae and Freddie Mac and permanently increases the conforming loan limit to help buyers in high-cost markets. To reassure financial and global markets, the government will temporarily expand its line of credit to Fannie and Freddie and permit the U.S. Treasury to purchase an equity stake in the companies through the end of 2009.

- Mortgage Revenue Bond Program. The measure gives states the ability to issue an additional $11 billion in mortgage revenue bonds, which will help strapped borrowers seeking to refinance their home loans.

- Low Income Housing Tax Credit. Enhancing this program will expand the supply of much-needed affordable rental housing.

Tax Credit Centerpiece of Housing Bill

The centerpiece of the housing bill is a temporary, $7,500 first-time home buyer tax credit for the purchase of any home. The tax credit can be used for homes purchased between April 9, 2008 and July 1, 2009. It is expected to provide a significant-and temporary-financial incentive for home buyers.

“The tax credit is the best stimulative measure,” said Dunn. “It will increase housing demand, get home buyers back into the marketplace and fight falling home prices, which threaten the economy as a whole.”

The original eligibility period expired in April 2009, but following a major grassroots campaign from NAHB members, the period was extended to June 30, 2009 to enable home builders to include the credit in their sales and marketing next spring and into the early summer-the peak home buying season.

NAHB has launched a new website, www.federalhousingtaxcredit.com, which includes a set of comprehensive questions and answers about how the credit works and how consumers can put it to their advantage.