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Tax Scams Targeting Poor, Elderly

July 19, 2011 (Belleville News-Democrat, Ill.) Taxpayers beware: Scammers are out there and they're digging for your personal information and for money.

The IRS is reporting an increase in tax return related scams that typically involve taxpayers who normally do not have to file federal taxes. The scammers con the taxpayers into believing they should file a return with the IRS for tax credits, refunds or rebates for which they are not entitled.

Some unscrupulous tax return preparers have been deceiving people into paying for advice about how to file false claims and some charge unreasonable amounts for preparing legitimate returns that could have been prepared for free by the IRS or by IRS sponsored Volunteer Income Tax Assistance partners.

Many of the scammers are targeting taxpayers in the Midwest and in the South, according to Sue Hales, spokeswoman for the IRS for Illinois. Some are stealing the identities of conned taxpayers and they most often prey on low income individuals and the elderly.

Taxpayers should be wary of any of the following claims:

-- 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. Flyers and advertisements for free money from the IRS, suggesting the taxpayer can file with little or no documentation, have been appearing in community churches around the country. Promoters are targeting church congregations and exploiting their good intentions and credibility. These schemes often spread by word of mouth among unsuspecting, well-intentioned people telling friends and relatives;

-- Home-made flyers and brochures implying credits or refunds are available without proof of eligibility;

-- 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 credit or a program can visit or call the IRS toll-free at (800) 829-1040 or visit a local IRS Taxpayer Assistance Center.


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Copyright (c) 2011, Belleville News-Democrat, Ill.

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