New tax scam targets West Alabama counties

Last week, the Internal Revenue Service issued a warning about a tax scam targeting those on social security retirement or social security disability in West Alabama. According to a media specialist for the IRS, Choctaw, Lamar, Pickens, Sumter, and Washington counties have all had instances of this new scam. Other counties, which might also be effected, are Butler, Clarke, Dallas, Fayette, Greene, Hale, Lowndes, Marengo, Perry, Tuscaloosa, and Wilcox. The IRS first received word of a possible scam when individuals and banks reported a large quantity of checks being cashed, which sent up the red flag for a scam. The way this scam usually works is a scam artist will offer to prepare their tax returns for free, 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. Then 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, the agency 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.

Source: http://www.demopolistimes.com/articles/2007/12/12/news/news9521.txt