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Scam Central


Tax scam targets seniors and low income




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August 25, 2011 | 1236 views | Post a comment

HOUSTON-The Internal Revenue Service is warning of a scam that promises a tax refund or rebate based on Social Security benefits.

"We are seeing a scam that encourages seniors to file tax returns, for a fee, to get a refund on withholding from Social Security," said IRS spokeswoman Lea Crusberg. "But because there was no withholding from the Social Security benefits, the return is false and the refund is neither allowed nor legitimate."

According to the IRS, flyers and advertisements for free money from the IRS, suggesting that the taxpayer can file a return and get a refund with little or no documentation, have been appearing in community churches around the country. These schemes are often spread by word of mouth among unsuspecting and well-intentioned people telling their friends and relatives, especially those who normally do not have a filing requirement.

"If something sounds too good to be true, it probably is. Promoters of these scams often prey upon low income individuals and the elderly, build false hopes and charge people good money for bad advice," Crusberg added. "When the victims discover their claims are rejected, their money and the promoters are long gone."

The IRS says taxpayers should be wary of any of the following:

·Fictitious claims for refunds or rebates based on excess or withheld Social Security benefits.

·Claims that Treasury Form1080 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 using the Earned Income Tax Claims based on exaggerated reports of self-employment income.

·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.

Anyone with questions about a tax creditor program should visit www.IRS.gov , call the IRS toll-free number at 800-829-1040 or visit a local IRS Taxpayer Assistance Center.
 


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