IRS warns of scam targeting Ala. seniors - Montgomery Alabama news.

IRS warns of scam targeting Ala. seniors

The Internal Revenue Service is warning senior citizens and other taxpayers to beware of an emerging federal tax refund scam tempting victims to file tax returns claiming fraudulent refunds. 

Bogus refund claims have been identified from Alabama and five other states: California, Georgia, Michigan, Louisiana and Indiana. 

"This scam is similar to ones identified in Alabama last summer," said IRS spokesman Dan Boone. "We want to warn the public to be on guard and stop this new scheme before more innocent people are victimized." 

Promoters falsely claim they can obtain a tax refund or nonexistent stimulus payment for their victims based on the American Opportunity Tax Credit, even if the victim was not enrolled in or paying for college. the IRS says Typically, con artists falsely claim that refunds are available even if the victim never went to college, or attended decades ago. 

These schemes carry a common theme of promising refunds to people who have little or no income, and are normally not required to file a federal income tax return. In many cases, scammers are targeting seniors, people with very low incomes and members of church congregations with false promises of free money. 

The IRS says it has already detected and stopped thousands of these bogus refund claims in recent weeks. The agency is actively investigating the sources of this scheme, and its promoters can be subject to criminal prosecution. 

These schemes can be quite costly for victims as promoters may charge exorbitant upfront fees to file their claim. Some promoters of these scams have charged the victims $500 for a bogus $1,000 credit. 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. 

Taxpayers should beware of any of the following to avoid becoming ensnared in these schemes: 

• 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.

These refund schemes feature 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

INFORMATION SOURCE: Internal Revenue Service

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