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IRS warns of scam targeting elderly The Internal Revenue Service issued an urgent warning Dec. 4 about a tax scam targeting the elderly and others in Alabama. People are encouraged to be wary if anyone approaches them about filing for a tax refund by somehow using Social Security retirement or disability benefit amounts. Senior citizens and others may be targeted directly by the scam artists or may be encouraged to participate in the scam by citizens who innocently believe it to be legitimate. Residents in Choctaw and Washington County have been affected by the scam, said Dan Boone, IRS Media Specialist. The bottom line is this: Retirement or disability benefits received generally cannot be used to generate a legal tax refund. Any such claim filed with the IRS may result in civil or criminal penalties. Here's what to watch for: The scam artists usually offer, for a fee, to prepare tax returns reporting part or all of your Social Security benefits as taxable income. They may falsely claim some percentage of the benefits as tax withholding or claim the Earned Income Tax Credit, thereby generating a refund. The scammers often prepare as many as three years worth of false refund claims per person or couple. The victim then files the fraudulent tax returns and may even erroneously receive a refund from the IRS. However, even if the IRS issues the requested refund, it will demand the money back with interest and perhaps a penalty. By that time, the scam artist has moved on and the victim is out the fees they paid to prepare the false returns. If you have been a victim of this scam, you should immediately: • Contact your local law enforcement to report the person to whom you paid the fees for having an illegal tax return prepared. • File an amended tax return Form 1040X) to reverse each false return filed. • Be prepared to pay back any refund you received as a result of a false return, plus penalties and interest. • Return scam-related refund checks that you have not cashed to the IRS immediately.
If you have questions about how to prepare and file an amended tax return, please contact the IRS toll-free at 1-800-829-1040 or visit www.irs.gov.
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