Tax Scams Target Seniors, Church Members

The Internal Revenue Service is warning of tax preparers promising large tax refunds to people who have little or no income and who normally have no a tax filing requirement.

The usual targets are seniors, people with very low incomes and members of church congregations.

“This is a disgraceful effort by scam artists to take advantage of people by giving them false hopes of a nonexistent refund,” IRS Commissioner Doug Shulman said in a news release.

Promoters may charge exorbitant upfront fees to file these claims and are often long gone when victims discover they’ve been scammed.

The IRS is reminding people to be careful because all taxpayers, including those who use paid tax preparers, are legally responsible for the accuracy of their returns, and must repay any refunds received in error. 

Con artists usually say they can obtain a tax refund or nonexistent stimulus payment based on the American Opportunity Tax Credit, even if the victim was not enrolled in or paying for college.

Con artists say that refunds are available even if the victim went to school decades ago. This is false, the IRS says.

A variation of the scheme says the college credit compensates for paying taxes on groceries.

To get the facts on tax benefits related to education, go to the Tax Benefits for Education Information Center on IRS.gov.

To avoid becoming ensnared in this scheme, the IRS says taxpayers should beware of any of the following:

• Fictitious claims for refunds or rebates based on false statements of entitlement to tax credits.
• Unfamiliar for-profit tax services selling refund and credit schemes to the membership of local churches.
• Internet solicitations that direct individuals to toll-free numbers and then solicit social security numbers.
• Homemade 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 for economic stimulus payments. 
• Unsolicited offers to prepare a return and split the refund. 
• Unfamiliar return preparation firms soliciting business from cities outside of the normal business or commuting area.

This refund scheme features many of the warning signs IRS cautions taxpayers to watch for when choosing a tax preparer. For advice on choosing a competent tax professional, see  Tips for Choosing a Tax Return Preparer on IRS.gov