Vanessa here from AllClear ID.Â The Internal Revenue Service is warning of a new tax refund scam by some organizations claiming to help people get a tax refund or stimulus payment based on the American Opportunity Tax Credit, even if the person wasnâ€™t paying for or enrolled in college.
Fake claims have come from several states, including California, Georgia, Indiana, Louisiana and Michigan. The people being targeted include senior citizens, church members and low-income households that donâ€™t need to file federal tax returns. The scammers claim refunds are available even if the person never went to college, or went decades ago. The IRS said some of the scammers have charged $500 for an invalid $1,000 credit.
The IRS is detecting and stopping thousands of fake claims, and is conducting an investigation to catch and stop the scammers. Because those claims are being rejected, the victims are left without the fees they paid to the fake organizations. But according to the IRS, itâ€™s the taxpayer, even those who use a service to file their taxes, who is ultimately responsible for the accuracy of their tax returns — and theyâ€™re on the hook for any refunds they werenâ€™t eligible for. That may also mean additional interest or penalties added to the tax bill.
Be on the lookout for:
- Tax organizations youâ€™ve never heard of, especially those trying to sell refund and credit schemes to local church members
- Online solicitations directing people to toll-free numbers where theyâ€™re asked to provide a social security number
- Offers of money without documentation
- Refunds promised for low-income people without needing documents for tax returns.
- Claiming to get credit for economic stimulus payments or the Economic Recovery Credit Program
- Unfamiliar companies offering to prepare a return and split the refund
To read more about keeping your identity safe during tax season, check out our blog.
Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.