Monday, 15 August 2011

IRS Warns of California Refund Scam Targeting Elderly, Disabled

The Internal Revenue Service is warning California residents about a refund scam that is aimed at the elderly and disabled. Several instances of such scams have been reported from Sacramento, Fresno, Stockton and the San Francisco Bay Area.

The refund scheme involves con artists who convince people that they are eligible for a refund through the "Making Work Pay" tax credit and charge a fee to procure these refunds. The tax credit itself is legitimate. In 2009 and 2010, these tax credits were issued to allow working individuals to recover up to $400 per person over the course of the year based on the taxpayer's wages. However, only employed individuals were eligible for these tax credits. The scammers have targeted the elderly and disabled, who are not employed and were therefore not eligible for tax credits. In most of these cases, scammers convinced victims that they could recover tax refunds of up to $800 for them.

The scammers have been fleecing potential victims of hundreds of dollars, claiming fees for the paperwork necessary to receive the refund. The Internal Revenue Service still does not know much about how the scam is being operated. The agency doesn't even know whether the same people are operating the same scam, or whether more individuals are involved

While most of the victims are the elderly and disabled, but California tax relief lawyers have also come across cases involving members of the Asian communities as well as low-income groups. Many of the immigrants targeted in the scams belong to the Laotian, Hmong Vietnamese, and Cambodian communities.

Yet another tax scam in California is based on Social Security benefits. In this scam, con artists have been targeting the elderly at churches and community centers inviting them to apply for a refund of tax withholding from Social Security for a fee. Los Angeles tax law lawyers advise everyone to beware of these and similar tax scams and to thoroughly research any company or individual who claims to be able to obtain tax refunds on your behalf. If you have an doubts, you should contact your CPA, or an experienced California tax law firm.

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