Beware of tax filing scams, IRS warns

The Internal Revenue Service is urging taxpayers to beware of phony IRS emails, texts, calls and letters that attempt to trick individuals into giving out personal financial information.

One of the most common tax scams involves phishing for private information by someone impersonating the IRS. The scammer may say that there is a problem with a refund and he or she needs your personal and/or financial information to resolve the issue. These phishing attempts have been known to happen via phone or email.

In recent weeks, the IRS has identified and stopped an increase of these bogus refund claims. A recent scheme carries a common theme of promising refunds to people who have little or no income and normally don’t have a tax-filing requirement. Under the scam, promoters claim they can obtain for their victims a tax refund or nonexistent stimulus payment based on the American Opportunity Tax Credit, even if the victim was not enrolled in or paying for college.

The IRS claims to be actively investigating the sources of the scheme, and its promoters may be subject to criminal prosecution. “This is a disgraceful effort by scam artists to take advantage of people by giving them false hopes of a nonexistent refund,” said IRS Commissioner Doug Shulman, in a statement.

The IRS has already detected and stopped thousands of these fraudulent claims, however, the scams can still be costly for victims. Promoters may charge excessive upfront fees to file these claims and are often long gone when victims discover they’ve been scammed.

The IRS is reminding people to be careful because all taxpayers, including those who use paid tax preparers, are legally responsible for the accuracy of their returns, and must repay any refunds received in error.

To avoid becoming trapped in a tax scam, the IRS says taxpayers should beware of any of the following:

• Fictitious claims for refunds or rebates based on false statements of entitlement to tax credits.
• Unfamiliar for-profit tax services selling refund and credit schemes to the membership of local churches.
• Internet solicitations that direct individuals to toll-free numbers and then solicit social security numbers
• 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 for economic stimulus payments.
• Unsolicited offers to prepare a return and split the refund.
• Unfamiliar return preparation firms soliciting business from cities outside of the normal business or commuting area.

For advice on choosing a competent tax professional, see the IRS’s Tips for Choosing a Tax Return Preparer.