Public warned against tax scams

The Internal Revenue Service has gained support from colleges and senior citizen organizations to combat scams aimed at targeted taxpayers among those groups.

According to the IRS, scammers are seeking victims for whom they can file tax returns claiming fraudulently inflated refunds. Bogus refund claims have been identified from Louisiana and at least five other states, including California, Georgia, Michigan, Alabama and Indiana.

“Most of these scams involve promoters who prey upon people in need, building false hopes. When victims’ claims are rejected, their money and the promoters are long gone,” IRS spokesperson Dee Harris Stepter said. “We want to warn the public to be on guard and stop this new scheme before more innocent people are victimized.”

Tax scams typically carry a theme of promising refunds to people who have little or no income, and are normally not required to file a federal income tax return. Promoters falsely claim they can obtain a tax refund or nonexistent stimulus payment based on the American Opportunity Tax Credit, even if the person was not enrolled in or paying for college.

Other scams promise a refund or rebate claiming it is due to changes in tax codes. The scammer will then ask for bank account data under the claim of offering a direct deposit, or other personal information that could lead to emptying accounts or various other forms of identity theft.

Terrebonne Council on Aging Executive Diana Edmonson and Nicholls State University Computer Science Director Charles Bordon have not heard of people being taken advantage of in Terrebonne or Lafourche parishes, in the latest schemes, but warn that not hearing about it does not mean it has not or will not occur.

“We always tell our seniors, ‘Don’t give anybody your Social Security number or your bank number over the phone,’” Edmonson said. The COA director said her agency takes steps to educate clients on potential scams in an effort to protect them from becoming victims.

“We just keep reminding people to not give out information,” Edmonson said. “They can take a name and number and bring it to the senior center. We’ll check it out.”

In addition to being alert and documenting possible scams, technology has made it easier to head off scammers.

Bordon said that additional filtering is offered to protect on campus accounts, but technology still does not replace personal responsibility and being informed about risks.

Nicholls State University is among a growing number of colleges and universities using software to block unwanted messages. “We utilize Google for student and faculty/staff members,” Bordon said. “It is like a gmail but tailored to institutions like universities. You have your own address, but it does a fantastic job in filtering unsolicited email.” The IRS has already detected and stopped thousands of bogus refund claims this year. The agency is actively investigating the sources of scams, and promoters can be subject to criminal prosecution.

Fraudulent refund activity can be costly for victims as promoters may charge exorbitant upfront fees to file their claim. Some promoters of these scams have charged victims $500 for a bogus $1,000 credit.

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, plus any interest and applicable penalties. Those who intentionally try to defraud the government may face criminal prosecution.

Stepter said taxpayers should beware of any of the following to avoid becoming ensnared in these schemes:

• 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.

Refund schemes contain many of the warning signs IRS representatives caution taxpayers to watch for when choosing a tax preparer. For advice on choosing a competent tax professional, see Tips for Choosing a Tax Return Preparer at www.IRS.gov. The website also provides facts on tax benefits related to education.