The IRS is warning Illinois taxpayers to be wary of a tax scam that involves people posing as tax preparers.
The fake tax preparers lure victims in by promising large refunds from the IRS and frequently involves education credits or the Earned Income Tax Credit.
People who have fallen for this scam discover that the scam may cost them their federal benefits, ranging from certain veterans benefits to Social Security payments or low-income housing benefits.
The scammers may operate out of a store front and may appear to be legitimate tax preparers that recently opened for business, according to Michael Devine, an IRS spokesperson for Illinois. Some scammers lure victims in with street corner signs or flyers. Victims who respond are promised large refunds and asked to provide their personal and financial information, which is then used to file a false claim with the IRS, sometimes without the victim even knowing what was filed.
The IRS says the scheme mainly targets low-income and non-English-speaking people who usually don't have a tax filing requirement. The IRS was alerted to the scam by victims complaining about losing their federal benefits, such as social security benefits, certain veteran's benefits or low-income housing benefits.
The IRS reminds taxpayers to be careful when choosing and hiring an individual or firm to prepare their tax return and recommends using only preparers who:
* Ask for proof of income and eligibility for credits and deductions
* Sign the return as the preparer,
* Enter their IRS Preparer Tax Identification Number (PTIN), and
* Provide the taxpayer a copy of the return