As compared to a national debt of $13 trillion, Fed money printing of $1.7 trillion, annual Federal budget deficits of about $1.5 trillion, and bailout/stimulus programs of almost $1 trillion, the IRS is doing a bang-up job in handling the homebuyer tax credit claims, losing only a fraction of those amounts, as detailed in this report at MarketWatch today.

The Internal Revenue Service doled out more than $27 million in fraudulent claims for the home buyers’ tax credit on returns for 2008, including claims by prisoners serving life sentences and people who purchased their home before the credit was in effect, a Treasury Department report said Wednesday.

The IRS paid out $9.1 million to 1,295 people who were in jail at the time they said they bought a home, and 241 of those prisoners were serving life sentences, according to the report from the Treasury Inspector General for Tax Administration, which monitors the Internal Revenue Service. On average, that’s slightly more than $7,000 per prisoner.

Another $17.6 million went to 2,555 people who bought their homes before the tax credit became law — averaging out to about $6,890 per person.

In other fraudulent claims, the total cost of which the Treasury inspector general was not yet able to quantify, the same home was claimed by more than one taxpayer. About 10,280 people got a tax credit for a home that also was used by another taxpayer to claim the credit, according to the report.

Amazingly, the same address was reportedly claimed as a qualifying home purchase on 67 different tax returns. Even more amazingly, almost 100 IRS workers have filed fraudulent claims related to this very popular tax credit.