The PM Group

The IRS has noted an increase in
tax-return-related scams, frequently involving unsuspecting taxpayers who
normally do not have a filing requirement in the first place. These 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. Many of these recent
scams have been targeted in the South and Midwest.

Most paid tax return
preparers provide honest and professional service, but there are some who engage
in fraud and other illegal activities.   Unscrupulous promoters deceive people
into paying for advice on how to file false claims. Some promoters may charge
unreasonable amounts for preparing legitimate returns that could have been
prepared for free by the IRS or IRS sponsored Volunteer Income Tax Assistance
partners. In other situations, 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.
• 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 Recovery Rebate
  Credit.
• Advice on claiming the Earned Income Tax Credit based on exaggerated reports
  of self-employment income.

In some cases non-existent Social Security refunds or rebates have been the
bait used by the con artists.  In other situations, taxpayers deserve the tax
credits they are promised but the preparer uses fictitious or inflated
information on the return which results in a fraudulent return.
Flyers and advertisements for free money from the IRS, suggesting that the
taxpayer can file with little or no documentation, have been appearing in
community churches around the country. Promoters are targeting church
congregations, exploiting their good intentions and credibility. These schemes
also often spread by word of mouth among unsuspecting and well-intentioned
people telling their friends and relatives.
Promoters of these scams often
prey upon low income individuals and the elderly.
They build false hopes and charge people good money for bad advice.  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.

Unsuspecting individuals are most likely to get caught up in scams
and the IRS is warning all taxpayers, and those that help others prepare
returns, to remain vigilant. If it sounds too good to be true, it probably
is.