Due to recent scams targeting taxpayers in the South and Midwest, the IRS is warning against scammers who are trying to persuade them to file false claims for tax credits and/or rebates. The IRS has noticed an increase in these tax-return-related scams, involving taxpayers who normally do not have a filing requirement in the first place. These taxpayers are being led to believe they should file a return with the IRS for tax credits, refunds or rebates for which they are not entitled. In some cases, non-existent Social Security refunds or rebates have been the bait used by the con artists. In other situations, taxpayers deserve the tax credits they are promised but the preparer uses fictitious or inflated information on the return which results in a fraudulent return. Most paid tax return preparers provide honest, sound, professional advice to their clients, but there are some engaging in fraudulent activities. Schemers are encouraging people to pay for advice on how to file false claims, while others are charging unreasonable amounts of money for preparing legitimate returns that could be prepared for free by the IRS or an IRS sponsored Volunteer Income Tax Assistance partner. According to the IRS, you should be cautious of the following:
- Fictitious claims for refunds or rebates based on excess or withheld Social Security benefits.
- Claims that Treasury Form 1080 can be used to transfer funds from the Social Security Administration to the IRS enabling a payout from the IRS.
- Unfamiliar for-profit tax services teaming up with local churches.
- Home-made flyers and brochures implying credits or refunds are available without proof of eligibility.
- Offers of free money with no documentation required.
- Promises of refunds for “Low Income–No Documents Tax Returns.”
- Claims for the expired Economic Recovery Credit Program or Recovery Rebate Credit.
- Advice on claiming the Earned Income Tax Credit based on exaggerated reports of self-employment income.
Anyone with questions about a tax credit or program should visit www.IRS.gov, call the IRS toll-free number at 800-829-1040 or visit a local IRS Taxpayer Assistance Center.
For questions about rebates, credit and benefits from other federal agencies contact the relevant agency directly for accurate information.