Blog & Company News
Jul 15, 2011
Tax Fraud Taken to Unholy Levels
[caption id="attachment_393" align="alignright" width="367" caption="Talk about wolves in sheep's clothing."]
Talk about wolves in sheep’s clothing.
Some scammers posing as tax-service providers are putting fliers in churches, advertising their ability to help taxpayers claim “found money.”
The “found money” flier distributors are one of the types of scammers the IRS is warning against. The IRS this week reminded taxpayers to be leery of people who try to get them to make tax-credit, refund, or rebate claims.1
Other examples include offering to help people apply for Social Security-based rebates or “free money with no documentation required,” according to the IRS press release.
Scammers are targeting low-income individuals, and they’re especially targeting the South and Midwest.
“This isn’t brand new,” said Anthony Burke, spokesman for the IRS, in a phone interview. “This kind of thing has been around for a long time. But we have been hearing that there may have been a slight uptick in this in certain locations.”
“Most taxpayers file a correct return timely and voluntarily, and most taxpayers know what they’re entitled to,” he said.
Additionally, the IRS prepares returns for free for taxpayers who earn less than a certain amount. Currently, that annual income cap is set at $49,000.
How do you know whether a tax service is reputable?
“Don’t go to a fly-by-night operation,” Burke said. “Go to someone who’s well known in the community.”
Burke said that anyone who is approached by one of these tax services should go to her local IRS office and talk to an employee.2
Burke also recommended that a person verify the service with her local Chamber of Commerce or Better Business Bureau.
Also, ask whether the preparer is an “authorized electronic return originator,” Burke said. If the preparer says “yes,” ask him to show you his documentation. The IRS sends the documentation to tax preparers.
Burke said the axiom still applies: “If it sounds too good to be true, it probably is.”
If you have any questions about these scams or about taxes in general, you may be able to visit a Taxpayer Assistance Center this Saturday, July 16. The IRS is holding a “fresh start” open house, and several centers will be open. To find a location near you, click here
For more information, visit:
1. “IRS Urges Taxpayers to Avoid Becoming Victims of Tax Scams
2. “Contact My Local Office