Written by: Paul B. Murray, CPA, ABV, CFF
Unscrupulous tax preparers are luring unsuspecting senior citizens into filing claims for fraudulent tax refunds the IRS announced. The scam involves convincing both tax filers and those with little or no income who are not required to file that they are entitled to federal refunds. Their claims are based on false and misleading information often citing nonexistent rules and regulations or “buzz words” that may sound convincing to someone with limited knowledge of the tax code. It’s understandable with the numerous tax rebates, refundable credits, stimulus programs and the ever changing tax laws that an individual may be confused and susceptible to such scams. The IRS provided a list of situations that should be considered an immediate red flag warning to individuals, including 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.
The IRS cautions taxpayers to choose wisely when selecting a tax preparer. Ask friends and family for a referral, check web sites, community activity and how long the firm has been in business.
We realize that most of our readers wouldn’t fall prey to such scams but if you have elderly friends, family or neighbors remind them:
When It Sounds Too Good To Be True……………..