IRS Newswire: Tax Scam Abusing College Tax Credit

The IRS has released a warning to the public in regards to tax schemes that promise higher refunds to those with low income.  The IRS would like to specifically warn the elderly, church members, and working families.  Under this scheme, the promoter claims to be able to obtain a tax refund or “non existent stimulus payment” based on the American Opportunity Credit, even if the person was not enrolled in an accredited post-secondary institution.

The IRS has started cracking down on several areas of noncompliance, and this is one of those areas.  The Internal Revenue Service has identified and stopped an upsurge of the fraudulent claims.  These claims are being actively investigated.  There is potential for criminal prosecution.

The IRS would like to remind the public that all taxpayers are legally responsible for the accuracy of their tax returns, even if they used a preparer, and they must repay any refunds received in error.

Essentially, there is a certain amount of care everyone should take regarding his or her tax return.   Use a tax professional that you know and trust, and take the time to ask questions if you don’t understand something on your return.

For more information please see IRS Newswire Issue Number: IR-2012-29