<h1>Tax scam promises churchgoers 'free money'</h1><span class="byline">By <a href="mailto:blake.ellis@turner.com">Blake Ellis</a></span> <a href="https://twitter.com/intent/user?screen_name=cnnmoney" class="soc-twtname">@CNNMoney</a>
<span class="cnnDateStamp">March 6, 2012: 5:55 AM ET</span><div id="ie_dottop"> <img src="http://i2.cdn.turner.com/money/2012/03/06/pf/taxes/tax_scam_churches/church-exterior.ju.top.jpg" alt="Churchgoers are among the most common targets for tax scams, the IRS said." border="0" height="307" width="475"><p>
Churchgoers are among the most common targets for tax scams, the IRS said.</p></div><p>NEW
YORK (CNNMoney) -- The IRS is cracking down on scammers promising
elderly and low-income churchgoers "free money" by urging them to claim
fraudulent tax refunds. </p><p>The nationwide scheme, which reaches
victims through flyers and online advertisements, claims taxpayers can
receive non-existent Social Security refunds or other tax rebates and
credits for which they don't qualify. The con artists often tell
taxpayers that they don't even need the proper paperwork to claim the
refunds. </p><p>The
"free money" plots tend to target people with such low incomes that
they aren't required to file taxes, so the victims are caught off guard
when they are told they are missing out on lucrative credits and
refunds. Once they file the returns for their victims, the promoters
collect steep fees for their "services" and run off with the money, the
IRS said.</p><p>"In the end, the victims discover their claims are
rejected or the refund barely exceeds what they paid the promoter.
Meanwhile, their money and the promoters are long gone," an IRS
spokeswoman said.</p><p>Even if a taxpayer hires a preparer to submit a
return and has no idea they are part of a scam, they are still legally
responsible for the information in their return and will therefore be
required to repay any money they receive fraudulently, the IRS said.</p><p>One
scheme that has been especially rampant this tax season promises senior
citizens they can get refunds or stimulus payments based on the
American Opportunity Tax Credit, a credit for college students or
parents paying tuition and expenses. However, many of the senior
citizens claiming the credit haven't seen the inside of a classroom in
years, the IRS said. Another variation falsely informs people that they
can claim the college credit to offset taxes they've paid on groceries.<b> </b> </p><p>The IRS said refund-related <a href="http://www.irs.gov/businesses/small/article/0,,id=106788,00.html" target="new">tax scams</a>
like these spiked last summer and have spread from Virginia and the
Southern United States to the Midwest. Generally, they have been less
prevalent in the West and Northeast.</p><p>Churchgoers are among the most common targets, the IRS said.</p><h2><a href="http://money.cnn.com/2012/02/16/pf/taxes/tax_scams/index.htm">IRS: Beware of 'dirty dozen' tax scams</a></h2>
<p>"Promoters
are targeting church congregations, exploiting their good intentions
and credibility. They build false hopes and charge people good money for
bad advice," said an IRS spokeswoman.</p><p>Betty Yee, a member of the
California Board of Equalization, the government agency in charge of the
state's tax administration, said these scams have been showing up in
Fresno, Sacramento, Stockton and the San Francisco Bay Area. They have
been especially prevalent among ethnic minorities, namely the Southeast
Asian community.<b> </b></p><p>Last year, local <a href="http://www.irs.gov/charities/churches/index.html" target="new">community churches and organizations</a>
reported that scammers were conning residents in Vietnamese, Cambodian,
Laotian and Hmong communities into thinking they were eligible for the
Making Work Pay tax -- a payroll credit of up to $400 per worker<b> </b>-- when many of them weren't even working, Yee said.</p><p>They
would allegedly approach some victims in person and speak to them in
their native language, often claiming to represent a non-profit tax
assistance organization, said Yee. Other con artists would send flyers
and paperwork to churches, and the churches would distribute them to
members, thinking that they were legitimate advertisements for tax
professionals.</p><p>"They go through churches because people trust
church officials," said Yee. "But particularly for low-income
communities, there are free resources to help them with tax issues --
they shouldn't be looking to pay someone a fee. That's a big warning
sign."</p><p>Because of ongoing investigations, <a href="http://www.irs.gov/irs/index.html" target="new">the IRS</a>
won't reveal details about the number of scams being perpetrated and
the names of the specific churches involved. But the agency said that
there are several red flags that people should be wary of. </p><p>These
include claims that elderly taxpayers can get refunds and rebates based
on excess or withheld Social Security benefits and claims that Treasury
Form 1080 can be used to transfer funds from the Social Security
Administration to the IRS and result in a payout to taxpayers.</p><h2><a href="http://money.cnn.com/2012/02/13/pf/adoption_tax_credit/index.htm">The $13,000 adoption tax credit is back!</a></h2><p>Consumers
should also be skeptical of any unfamiliar for-profit tax services that
team up with local churches, as well as homemade flyers and brochures
that suggest credits or refunds are available with little or no
documentation. Some of these scammers advertise that low income
taxpayers can file their returns with catch lines like, "Low Income --
No Documents Tax Returns," implying that low-income earners can get
refunds without supplying necessary documentation and proof of
eligibility.</p><p>The IRS has been trying to raise public awareness by
issuing nationwide alerts, and alerting individual churches to be on
watch for con artists. <a href="http://money.cnn.com/2012/03/06/pf/taxes/tax_scam_churches/index.htm#TOP"><img src="http://i.cdn.turner.com/money/images/bug.gif" alt="To top of page" border="0" height="7" width="7"></a></p>
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