IRS Issues Tax Scam Warning for American Opportunity Tax Credit
Overview of the Scam
The IRS has recently issued a warning about a tax scam involving the American Opportunity Tax Credit. This fraudulent scheme is targeting senior citizens, low-income individuals, and members of church congregations. The scammers claim they can secure tax refunds or stimulus payments based on the American Opportunity Tax Credit, even if the taxpayer was neither enrolled in nor paying for college.
Risks to Victims
Victims of this scam often lose the upfront fees they pay to have the fraudulent claims filed on their behalf. The IRS has stressed that taxpayers are legally responsible for the accuracy of their tax returns. Consequently, any refunds received in error must be repaid, along with potential penalties and interest. Furthermore, individuals may face criminal prosecution if they are found to be involved in such schemes.
Common Warning Signs
The IRS has outlined several red flags that taxpayers should be cautious of:
- Fictitious Refund Claims: Be wary of any claims for refunds or rebates based on false statements of entitlement to tax credits.
- Unfamiliar Tax Services: For-profit tax services selling refund and credit schemes to church members should be approached with caution.
- Internet Solicitations: Internet schemes directing individuals to toll-free numbers to obtain social security numbers are often fraudulent.
- Homemade Flyers: Brochures and flyers suggesting credits or refunds are available without proof of eligibility should be scrutinized.
- Offers of Free Money: Any offers of free money with no documentation required are likely scams.
- Low-Income Returns: Promises of refunds for “Low Income — No Documents Tax Returns” are typically fraudulent.
- Expired Credit Claims: Claims for the expired Economic Recovery Credit Program or for economic stimulus payments should be questioned.
- Unsolicited Offers: Be cautious of unsolicited offers to prepare a tax return and split the refund.
- Unfamiliar Firms: Return preparation firms soliciting business from outside normal business or commuting areas may be suspicious.
Contact Us
For any questions regarding tax scams or other tax-related inquiries, please feel free to contact PWCPA PC. We are here to assist with ensuring your tax filings are accurate and secure.