This one shouldn't come as a big surprise - yet why does it seem so pathetic? From the WSJ:
The Internal Revenue Service is examining more than 100,000 suspicious claims for the first-time home-buyer tax break, another sign of potential trouble for the soon-to-expire program.
The $8,000 tax credit clearly has helped rejuvenate the housing market, which is one reason why the industry is lobbying Congress to extend it. Whether that's a good idea makes for an interesting debate, but the emergence of scammers will likely gum up the outcome. The IRS told a House subcommittee that it was investigating 167 "criminal schemes" involving the credit.
At a recent hearing of a White House tax advisory panel, Bonnie Speedy, national director of AARP Tax-Aide, a volunteer service for low-income people, suggested that abuse of the home-purchase credit appeared to be widespread, in part because of relatively loose standards for claiming the credit. The credit "has some fraud issues because it's not being done at the time of the sale," said Ms. Speedy. "People are filing for the home credit who don't have a right to file for it."