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IRS: Refund scam targets seniors, families, church members

The Internal Revenue Service is alerting senior citizens and others to watch out for a federal tax refund scam, tempting victims to claim fraudulent refunds.

IRS spokesman Mark Green said the scam usually involves refunds promised to taxpayers with little or no income. These people normally aren’t required to file a federal income tax return.

Victims are informed they can get a refund or nonexistent stimulus payment based on the American Opportunity Tax Credit, even if the person is not enrolled in, or paying for college, he said.

“Most of these scams involve promoters who prey upon people in need, building false hopes,” said Green. “When victims’ claims are rejected, their money and the promoters are long gone.”

In many cases, he said, seniors, low-income taxpayers and members of church congregations have been victims of free-money promises. Promoters charge their victims over-the-top fees for bogus refund claims, he said. Taxpayers have been charged $500 for a refund claim of $1,000.

He said the public should be on guard with this new scheme. This scam has been identified in other states, too, such as California, Michigan, Louisiana, Alabama and Indiana.

In recent weeks, said Green, the IRS has detected and rejected thousands of these false-refund claims. The IRS is investigating the scam’s sources and promoters, who can be subject to criminal prosecution, he said.

Taxpayers are legally responsible for the accuracy of their returns and must repay refunds received in error, in addition to interest and applicable penalties, he warned.

Green said people should beware of:

• False claims for refunds or rebates from bogus statements of entitlement to tax credits.

• Unrecognizable tax services selling refund and credit schemes to local church congregations.

• Internet advertisements, directing users to toll-free numbers and asking for social security numbers.

• Flyers and brochures advertising credits or refunds, obtained without proof of eligibility.

• Free money offers that don’t require documentation.

• Refund promises for “Low Income-No Documents Tax Returns.”

• Claims for the expired “Economic Recovery Credit Program,” or payments for economic stimulus.

• Unsolicited offers for a return preparation and a refund split.

• Unknown tax preparation firms from cities beyond the normal business or travel area.

For more information visit the IRS web site, at