Snyder and Associates

Tax Byte

IRS announces scheme claiming fraudulent refunds

On March 2, 2012 the IRS issued an information release (s/b IR-2012-29) as an urgent warning of an emerging scheme that tempts taxpayers to file returns claiming fraudulent refunds.  The phony scheme targets senior citizens, church members and working families.  It promises large refunds by a variety of fraudulent deductions, including claiming college tax credit and other benefits the taxpayer is not entitled to.  The IRS is continuing its investigation to find the source of the scam, but in the meantime is urging all taxpayers to be aware of the scam in case they, or someone they know, are contacted by the scam artist. 

Oftentimes the scam promoters charge exorbitant up-front fees to file the refund claim, convincing their victims that they are entitled to the college credit because they attended college in the past.  They also promise to split the refund when it arrives.  Any time they can convince a taxpayer to file a bogus return they have access to social security numbers, bank account and other personal information.

Another recent scam is the filing of bogus returns claiming large tax refunds for a taxpayer that is recently deceased.  These scam artists file returns in the name of the deceased, changing the filing address to something out of state, and claiming a large overpayment to be direct deposited into an account in another state.  It takes months after returns are filed for the IRS to cross reference the information on the return and by then, the scammers have moved on to another location.

Always keep in mind the old adage, if it's too good to be true, it probably isn't.  Contact the local authorities if you, or someone you know, is approached by someone making promises that do not seem right.  Always keep your information as private as possible, and monitor your banking activity and that of recently deceased relatives when you can.

Full text of s/b IR-2012-29

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