U.S. investigators say 128 employees of the Internal Revenue Service fraudulently claimed an $8,000 first-time home buyer tax credit for 2008 and 2009.
The investigators said the employees claimed the credit under the economic stimulus program, The Washington Times reported Tuesday.
The Treasury Department's inspector general for tax administration said the IRS employees represent only a small part of the total fraud in the program.
He told The Washington Times refundable tax credits that transfer money back to taxpayers even when their tax liability is zero "are targets for fraud."
Federal prosecutors in Boston said Michael E. Doyle of New Hampshire, who worked as a supervisor for the IRS in Andover, Mass., claimed a home he purchased in 2007 was bought in 2008.
In another case part-time IRS employee Catherine Griffin in Georgia was charged with altering information in IRS computers to help four friends and family members appear eligible for the credit.
She pleaded guilty to one count of accessing a computer without authorization and is awaiting sentencing.