Taxpayer Alert! Social Security refund scam

Taxpayers need to be cautious during tax season and take measures to avoid social security tax refund scam.

Tax time is quickly approaching and that means there will be plenty of schemes and scams around to lure unsuspecting taxpayers into fraudulent activity. One of the most prevalent scams involves the filing of a tax return so that the taxpayer can receive a refund based on an over-payment of social security funds.

Dishonest tax preparers convince the taxpayer that they are eligible for a refund of money paid into the social security system. These tax preparers claim that Treasury Form 1080 can be used to transfer funds from the Social Security Administration to the Internal Revenue Service (IRS), enabling a payout from the IRS. The clients may not even have a requirement to file taxes. However, they pay to have their taxes professionally prepared, expecting to receive a refund, which may never come. If a refund is received, it is based on a fraudulent return that contained inflated numbers. Consumers should be suspicious of any promises made to them regarding a rebate or refund based on withheld or excess social security funds.

There are different variations to this scam. Some taxpayers are promised refunds for reparation, cost of living, economic recovery credit or stimulus. It doesn’t matter what type of bogus promise is made, the results are the same.

Taxpayers should be cautious when having their taxes prepared. You may be eligible to have your taxes done for free by the IRS or IRS sponsored Volunteer Income Tax Assistance partners. Don’t rely on word of mouth. Investigate national tax preparation chains, certified public accountants and enrolled agents. Always ask for the preparer’s tax identification number. Above all, if the preparer begins to make promises about big refunds or talks of falsifying your return, leave immediately and report the preparer to the IRS.

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