Published Friday, January 11, 2013

IRS warns of scams


Scam artists – including some in Georgia – are trying to get personal information as tax season approaches.

The criminals "are getting a little more innovative," said Mark S. Green, media relations specialist for the IRS in Atlanta. He said scammers sometimes are sending text messages to people's telephones asking for information about a Social Security number or bank account numbers.

When many people who use cell phones get a call on their mobile phone, "you think that it's somebody you know," Green said.

The IRS also is encouraging taxpayers to guard against being misled by unscrupulous individuals trying to persuade them to file false claims for tax credits or rebates.

There often is an increase in tax-return-related scams during tax season. Suspicious activity has been reported throughout Georgia already this filing season.

“Don’t let yourself get involved in a tax scam or be victimized by one,” Green said. “Be very careful who you trust for tax advice and who you trust with your personal information.”

Con artists shamelessly take advantage of people. People should be on-guard for these scams, and safeguard their Social Security numbers and personal information.

Green emphasized the IRS "does not initiate contact with taxpayers by email, text, social media-electronic communications to request personal or financial information."

These scams may target unsuspecting taxpayers, such as the elderly or students, who normally do not have a filing requirement in the first place. Those individuals may be led to believe they should file a return with the IRS for tax credits, refunds or rebates for which they are not really entitled.

Most paid tax return preparers provide honest and professional service, Green said, 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. Anyone who is or may be a victim of identity theft, may contact the IRS Identity Protection Specialized Unit at 800-908-4490 so the IRS can take action to secure the person's tax account.

People who have received a notice or letter from the IRS that they believe is the result of ID theft should first contact the number on the IRS letter.

Green said taxpayers should be wary of any of the following:

• “Free Money” from the IRS and tax scams involving Social Security. Flyers and advertisements for free money from the IRS, suggesting that the taxpayer can file a tax return with little or no documentation, have been appearing in churches around the country.

These schemes are also often spread by word of mouth as unsuspecting and well-intentioned people tell their friends and relatives.

Scammers prey on 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. Meanwhile, the promoters are long gone.

There are a number of tax scams involving Social Security. For example, scammers have been known to lure the unsuspecting with promises of non-existent Social Security refunds or rebates. In another situation, a taxpayer may really be due a credit or refund but the scammer uses inflated information to complete the return.

Intentional mistakes of this kind can result in a $5,000 penalty.

A 2012 phishing scam involves a bogus email informing recipients that they will be penalized up to $10,000 for failing to file a tax return on time. The scam references a false deadline and mentions Section 6038. Sometimes the subject line reads: "Penalty for not filing tax return on time."

The email directs taxpayers to a phony website that appears to be the official IRS site. Taxpayers who click on the email link are taken to a phony site and asked to provide personal or financial information that can be used by scammers and identity thieves. The alleged penalty and the deadline are both fictitious.

Some people have received phone calls about the economic stimulus payments, in which the caller impersonates an IRS employee. The caller asks the taxpayer for their Social Security and bank account numbers, claiming that the IRS needs the information to complete the processing of the taxpayer's stimulus payment. In reality, the IRS uses the information contained on the taxpayer's tax return to process stimulus payments, rather than contacting taxpayers by phone or e-mail.

• Fictitious Education Tax Credit claims for students.

• 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.

• Claims for the expired Economic Recovery Credit Program or Recovery Rebate Credit.

• Advice on using the Earned Income Tax Claims based on exaggerated reports of self-employment income.

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