By Johnny Jackson
The Internal Revenue Service is encouraging taxpayers to guard against being misled by unscrupulous individuals attempting to persuade them to file false claims for tax credits or rebates.
IRS Spokesman Mark Green plans to spend part of this week touring southern Georgia, educating residents and officials about a tax scam encompassing the South to the Midwest regions.
"It's not just Georgia that we're looking at; we're looking at several different states," said Green on Tuesday, en route to a meeting on the subject in Savannah, Ga.
Green noted the IRS has experienced an increase in tax-return-related scams over the past several months, frequently involving unsuspecting taxpayers who normally do not have a filing requirement in the first place. The scams, he said, have continued even beyond the traditional filing season which typically ends April 15.
"It's an old scam with a different twist," he said. "Scam artists are going into local churches and promising large refunds to local congregations for a fee."
Green said scammers have tended to target religious organizations and their congregations by circulating flyers and speaking to church leaders -- "exploiting their good intentions and credibility."
He acknowledged many of the schemes have been spread by word of mouth among well-intentioned people telling their friends and relatives. He added the scams have tended to affect low-income individuals and the elderly with more frequency.
The IRS spokesman said taxpayers are led to believe they should file a return with the IRS for tax credits, refunds or rebates for which they are not really entitled. The scammers promise church members advice, sometimes in the form of educational seminars about tax preparation. They also offer services they falsely guarantee will help the individual taxpayer.
"They're saying that even though you have filed your tax returns, there is a credit that you didn't know you were eligible for," said Green. "They're filing a fraudulent return. They actually prepare the return and get the taxpayer to sign it. In the process, they end up getting a large percentage of the refund."
Green said some scammers may charge unreasonable amounts for preparing legitimate returns that could have been prepared for free by the IRS, or an IRS-sponsored Volunteer Income Tax Assistance partner.
In other situations, he said, identity theft is involved. Taxpayers should be wary of any of the following: 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; home-made flyers and brochures implying credits or refunds are available without proof of eligibility; and offers of free money with no documentation required.
Additionally, taxpayers should be skeptical of promises of refunds for "Low Income - No Documents Tax Returns;" claims for the expired Economic Recovery Credit Program or Recovery Rebate Credit; and advice on claiming the Earned Income Tax Credit based on exaggerated reports of self-employment income.
Green said non-existent Social Security refunds or rebates have been the bait used by con artists. Other taxpayers may deserve the tax credits they are promised, but the preparer uses fictitious or inflated information on the return which results in a fraudulent return.
"They [the preparer] build false hopes and charge people good money for bad advice," he said. "In the end, the victims discover their claims are rejected or the refund barely exceeds what they paid the promoter. Meanwhile, their money and the promoters are long gone.
"If it sounds too good to be true, it probably is," concluded Green. "Don't be misled or a victim of tax scam artists who hide behind the church or church leaders to persuade individuals to file false, bogus tax credits for their personal gain."
Anyone with questions about a tax credit or program should visit www.IRS.gov, call the IRS toll-free number at (800) 829-1040, or visit a local IRS Taxpayer Assistance Center.