The $8,000 federal tax credit for first-time home buyers might have been created as a way to jump-start the housing market, but it's also apparently stirred up some fraudulent activity, according to an article in today's Wall Street Journal. The Internal Revenue Service is reportedly investigating more than 100,000 suspicious claims out of the approximately 1 million tax-credit claims people have filed.

Loose oversight of the filing process is apparently to blame. The credit "has some fraud issues because it's not being done at the time of the sale," Bonnie Speedy, national director of AARP Tax-Aide, told a White House tax-advisory panel. "People are filing for the home credit who don't have a right to file for it."

The IRS's findings could dampen efforts to extend the tax credit past its current November 30 end date, to increase it to $15,000, and even to offer it to all home buyers.—Daniel DiClerico | e-mail | Twitter | Forums | Facebook

Essential information: Learn how to buy a foreclosed home and be sure to get a thorough inspection of any property you're considering. Once you've moved in, refer to our Kitchen-Planning Guide and Home Improvement Guide interactive.