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IRS Warns Taxpayers of Widespread Scam


August 30, 2011 (Knight Ridder/Tribune Business News) The Internal Revenue Service is warning taxpayers to be on the lookout for a widespread scam targeting church congregations and civic groups.



IRS spokesman David Stell said Tuesday the new scam is aimed at getting unsuspecting taxpayers to fill out illegitimate claims for IRS refunds or tax credits and to pay the scammers for filling out the fraudulent paperwork.

"We see scams year-round," Stell said, "but most of what we see is email or telephone scams where they're trying to get your personal information so they can steal your identity."

Unlike the common Internet, email and phone scams, the new scam involves teams of individuals appearing in person at churches and civic groups to entice people into filing for refunds to which they are not entitled.

"The unique aspect of this scam," Stell said, "is that they're going to churches and civic groups to offer 'something for nothing.' Unfortunately they are very good at what they do and they're very good at making people believe that there are credits or refunds available when there are not."

Stell said the traveling scam predominantly focuses on claims people can obtain refunds of the Social Security taxes they have paid over the years by transferring their Social Security benefits to the IRS and then filing for a credit. Victims of the scam pay the scammers to fill out the fraudulent paperwork, which is mailed into the IRS and duly rejected.

"Meantime," Stell said, "the people who have prepared the forms and taken their money have left town."

The scam is believed to have originated in Alabama, and it has since been reported to IRS officials in 33 states. Stell said it now is being seen in Arkansas, "and it looks to be headed towards Oklahoma."

The IRS is urging taxpayers to be wary of any of the following:

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

--Claims that Social Security benefits can be transferred to the IRS enabling a payout from the IRS.

--Unfamiliar for-profit tax services teaming up with local churches.

--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 Recovery Rebate Credit.

--Advice on claiming the Earned Income Tax Credit based on exaggerated reports of self-employment income.

Stell said anyone who suspects they are being targeted by this, or any other tax-related scam, should contact the IRS at (800) TAX-1040, 7 a.m. to 10 p.m. Monday through Friday.

"If something looks too good to be true," Stell said, "the easiest way to find out if it's legitimate is just to give the IRS a call."

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2011 the Enid News & Eagle (Enid, Okla.)

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