View Mobile Site

Text Size: Smaller Larger Normal

IRS warns of tax refund schemes

POSTED August 19, 2011 7:57 p.m.

The Internal Revenue Service is warning taxpayers to be wary of individuals promising tax refunds for a fee, because it may be part of a scam currently circulating in the Central Valley and the Bay Area.

The IRS has received reports of bogus refund schemes targeting Asian-American communities in Fresno, Sacramento, the San Joaquin Valley and the Bay Area. Additionally, a national scam aimed primarily at seniors and people with low income has also spread to various locations in California. 

“What these scams have in common is that the promoters prey upon people in need, building false hopes. When victims’ claims are rejected, their money and the promoters are long gone,” said IRS spokesman Jesse Weller. 

Schemes appearing in Northern and Central California primarily involve residents in Vietnamese, Cambodian, Laotian and Hmong communities. Scammers promise to obtain a federal tax rebate of up to $800, charging hundreds of dollars of fees in some cases. The claims are based on the Making Work Pay Credit, which most wage earners received in 2009 and 2010 through larger paychecks because of reduced federal tax withholding.

“We want everyone to take advantage of the legal deductions and credits which they are entitled to claim,” said Arlette Lee, a special agent with IRS Criminal Investigation. “However, we will vigorously pursue promoters and others who intentionally try to defraud the government.” 

A national scam based on Social Security benefits is surfacing in California that also markets a phony federal tax refund or rebate. Fliers and advertisements appearing in community churches encourage seniors and others to file tax returns, for a fee, to get a refund on tax withholding from Social Security. The withholding is nonexistent, and the claims are false. Many victims are not required to file a federal tax return.

The IRS says taxpayers should be wary of any of the following:

• False claims for the Making Work Pay Credit when no work was performed.

• 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 to enable an IRS payout.

• Unfamiliar for-profit tax services selling refund and credit schemes to local church congregations.

• Homemade fliers 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.”

Taxpayers who normally don’t need to file a tax return but who are entitled to a credit or refund can have their tax forms prepared for free by the IRS or a volunteer organization. Be suspicious of someone promising to get you a refund from the government if you just pay them a fee to do the paperwork.

Commenting is not available.

Share on Facebook Bookmark and Share
Commenting not available.

Please wait ...