The IRS is warning church groups, civic groups and their members about a scam where individuals appear at churches and/or civil groups and get unsuspecting people to file for bogus refunds. Mostly, the scam zeros in on refunds of Social Security taxes paid in over time, trying to transfer those taxes to the IRS and then filing for a credit. People then pay the scammers for their ‘services’. The paperwork that is filled out is given back to the taxpayer, who sends it to the IRS and then it is rejected. By now, the scammers have disappeared.
Identity theft could be another issue, although not widely reported yet. If the scammers keep a copy of the paperwork (as a paid preparer is supposed to do), then identity theft could be a concern.
IRS Spokesman David Stell said, “The unique aspect of this scam is that they’re going to churches and civic groups to offer ‘something for nothing.’ Unfortunately they are very good at what they do and they’re very good at making people believe that there are credits or refunds available when there are not.”
The IRS urges taxpayers to look out for the following:
- Claims for rebates or refunds based on excess Social Security benefits. These are almost always fictitious.
- A claim that the IRS can be a conduit for Social Security Benefits – it cannot!
- Churches or civic groups being asked to team up with unfamiliar tax advice groups or tax preparation services.
- Homemade flyers or promotional products that talk about tax refunds or credits being available without proof of eligibility.
- Groups offering tax preparation with no documentation required. This could be “No Document Tax Returns” or promises of refunds without presenting any documentation.
- Tax Preparers pushing you to take advantage as they will ‘only be available today’.
In addition, the scammers might discuss two recently expired tax credits called the Economic Recovery Credit Program and the Recovery Rebate Credit. Watch out for these words! Anyone promoting these credits is suspect.
My advice is to alert your church or civic group and to keep your eyes open. If your church or civic group has a day like this, have it video taped so people’s faces can be sent to the IRS and/or FBI. Also, always ask the ‘tax preparer’ about their background, how long they’ve been doing taxes, where they passed the CPA exam (it is given on a state basis so the person should respond “Ohio’ instead of ‘Cleveland’).
When in doubt, take a business card (assuming they have any) and say you’ll get back to them.
If you have any thoughts or questions, please don’t hesitate to contact me.
Hope you all enjoyed your Labor Day!