The Internal Revenue Service warned taxpayers Friday about an emerging tax scam that tempts the elderly, working families and church members into filing fraudulent tax returns that claim bogus refunds.
The scheme promises big refunds to low-income people, many of whom earn too little to have a tax filing requirement.
IRS officials said promoters of the scam tell victims they are eligible for refunds, based on payments they are owed under a college tax credit law called the American Opportunity Tax Credit.
“This is a disgraceful effort by scam artists to take advantage of people by giving them false hopes of a nonexistent refund,” IRS Commissioner Doug Shulman said in a statement.
The scammers claim their victims are eligible for refunds even if they went to college decades ago. IRS officials said they are also seeing a variation on the scheme that claims college credit is available to compensate people for paying taxes on groceries.
The agency said it already has stopped thousands of these claims, but in many cases it was not before victims paid high fees to promoters promising to file their fraudulent claims.
The IRS is reminding taxpayers that they are legally responsible for the accuracy of their returns.
The IRS said taxpayers should be aware of any of the following:
Fictitious claims for refunds or rebates based on false information that someone is eligible for a tax credit.
Unfamiliar for-profit tax services selling these credits to members of local churches.
Internet solicitations directing people to toll-free numbers and asking for Social Security numbers.
Homemade fliers and brochures advertising the scheme.
Offers of free money with no documentation required.
Unsolicited offers to prepare a return and split the refund.
Promises of refunds for “Low Income — No Documents Tax Returns.”
Claims for the expired Economic Recovery Credit Program or for economic stimulus payments.
For more information on tax scams, here’s the IRS’s 2012 Dirty Dozen list: