The Internal Revenue Service issued a warning this week about a tax scam targeting the elderly and disabled in Alabama.
Con artists are trying to convince citizens to prepare tax returns reporting part of their social security benefits as taxable income.
This scam was reported in several counties including Choctaw, Lamar, and Washington; but it could spread to the Wiregrass, and the public needs to be aware .
An important reminder to the elderly and disabled: retirement or disability benefits cannot be used to produce a legal tax refund.
Taxpayer Advisory Specialist Joe Rich said, "What these scammers do is they approach the elderly and the disabled and they say they can get a refund by filing on their social security and disability checks."
These checks are non-refundable however.
Scammers report them as if they are taxable, and will come up with any method possible to try and pull off the hoax.
Rich adds, "They are getting to these people by phone, email, door to door, and we think maybe by word of mouth or friends who tell elderly people who think its a legit refund."
Scammers will come up with three years worth of false refund claims to make it convincing.
They'll also have the victim pay a fee, which is how the scammer makes out in the deal.
Attorney at Law Clayton Davis says, "They're being asked to pay a fee, to file a fraudulent return and then secondarily, if the refund actually gets issued, the IRS will be first asking this elder person, ‘we want our money back; this was not a legitimate return’."
That means, upon filing this fraudulent return, the victim could face serious penalties.
As always, officials warn the public to never give out any information, especially your social security number.
Like the old adage says, "If it sounds too good to be true, it probably is," Rich said.
The IRS reminds taxpayers to avoid any preparer who claims to know about secret tax breaks or loopholes.
If you think you may have been a victim of a tax scam or have any questions about filing your tax return, you can call the Taxpayers Assistance Program, toll free at 1-800-829-1040.