The IRS is warning taxpayers to watch out for people promoting a tax refund or nonexistent stimulus payment based on the American Opportunity Tax Credit. This credit is available to taxpayers who have qualified college expenses, but promoters of the new scheme claim they can get a refund based on the credit even for people who aren't enrolled in or paying for college.
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Scam artists are targeting senior citizens, members of church congregations and people who have little or no income and normally aren't required to file a return, according to the IRS. Promoters of the scam often charge exorbitant upfront fees to file claims for nonexistent refunds.
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The IRS already has stopped thousands of these fraudulent claims and is investigating the source of them. However, the IRS warns taxpayers to be aware of the following to avoid becoming a victim:
-Homemade flyers and brochures implying tax credits are available without proof of eligibility.
-Offers of free money with no documentation required.
-Promises of refunds for "Low Income – No Documents Tax Returns."
-Unfamiliar for-profit tax services selling refund and credit schemes to the membership of local churches.
-Claims for the expired Economic Recovery Credit Program or for economic stimulus payments.
-Unsolicited offers to prepare a return and split the refund.
-Internet solicitations that direct individuals to toll-free numbers and then solicit Social Security numbers.
For more advice on how to avoid becoming a victim, see 5 Ways to Guard Against Tax Fraud
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