That's the headline from this blog post by Chris Morran over at The Consumerist.  As detailed by the report:

According to a report issued by the Treasury Dept.'s inspector general, 1,295 prisoners, including 241 serving life sentences, somehow managed to receive $9.1 million in credits, despite being locked up at the time.

The report clarifies that these were not prisoners filing joint returns with spouses in the outside world, so there's no way these cons could have purchased a home during the period for which the tax credit was available.