IRS Warns of Phony Refund Scheme
New scam targets families, seniors, church members
The Internal Revenue Service is warning senior citizens and other taxpayers to beware of an emerging scheme tempting them to file tax returns claiming fraudulent refunds.
The scheme promises refunds to people who have little or no income and normally don’t have a tax filing requirement, according to the IRS.
Unscrupulous tax preparers are claiming they can get a tax refund or stimulus payment with the American Opportunity Tax Credit, even if the victim is not enrolled in or paying for college.
In recent weeks, the IRS has identified an upsurge of these bogus refund claims coming in from across the United States.
Typically, the con artists falsely claim that refunds are available even if the victim went to school decades ago. In many cases, scammers are targeting seniors, people with very low incomes and members of church congregations with bogus promises of free money.
The IRS has also seen a variation of this scheme that incorrectly claims the college credit is available to compensate people for paying taxes on groceries.
In some cases, the tax preparer charges a large upfront fee to file the claim -- then is long gone with the victim discovers no refund is coming.
The IRS urges taxpayers to be suspicious tax preparers who:
• Promise refunds or rebates based on entitlement to tax credits
• Try to sell refund and credit schemes to church congregations
• Use the Internet to tout toll-free numbers and then try to get your Social Security number
• Advertise with homemade fliers that say refunds are available without proof of eligibility
• Offer free money with no documentation
• Promise refunds for “Low Income – No Documents Tax Returns.”
• Offer to prepare a return and split the refund.