Dollars & Sense

IRS warns about tax preparation scam in Missouri

Updated: 2013-04-12T00:40:50Z

By STEVE ROSEN

The Kansas City Star

A scam that promises large refunds mostly to low-income and non-English-speaking people has re-emerged in Missouri late in the tax-filing season.

The Internal Revenue Service has issued a warning about people posing as tax preparers and allegedly luring customers by promising refunds linked to education tax credits or the earned income tax credit.

The IRS said people who’ve been victimized “are discovering that a side-effect is that it will cost them their federal benefits,” including Social Security payments, certain veterans assistance and low-income housing support.

According to the IRS, some scammers operate what appears to be a legitimate tax preparation office and attract business with street corner signs or flyers that promise refunds. The victims are then asked to provide personal and financial information, which is used to file a false claim with the IRS, sometimes without the taxpayer even knowing what was filed.

The IRS said it was alerted to the scam by taxpayers who complained about losing their federal benefits. “The loss of benefits was the result of false claims being filed that provided false income amounts,” the IRS said.

Victims also have reported that the fraudulent refund was deposited into the scammer’s bank account. Then, the scammer deducted a large fee before issuing a check to the victim, according to the IRS.

While credible tax preparers provide their customers a copy of the tax return they’ve prepared, victims of this scam have reported they’ve not received a copy of what was filed, the IRS said.

To avoid problems, the IRS recommends working with tax preparers who:

•  Ask for proof of income and eligibility for credits and deductions.

• Sign the return as the preparers.

•  Enter their IRS preparer tax identification number and provide the taxpayer a copy of the return.

To reach Steve Rosen, call 816-234-4879 or send email to srosen@kcstar.com.

Deal Saver Subscribe today!

Comments

The Kansas City Star is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere on the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

The Kansas City Star uses Facebook's commenting system. You need to log in with a Facebook account in order to comment. If you have questions about commenting with your Facebook account, click here