Scammers are now targeting low-income and elderly churchgoers, according to the Internal Revenue Service. The tax agency has increasingly encountered the church tax scam during the last year, particularly amongst taxpayers in the South and Midwest.
Fraudsters promise churchgoers "free money," but really end up filing fraudulent tax returns. They claim taxpayers can obtain Social Security refunds and tax rebates, reports CNN Money. However, victims don't actually qualify under any of the rules.
Elderly and low-income individuals are prime targets, as they often make so little they do not file tax returns. So when they're told they can still take advantage of credits and receive refunds, they jump at the chance.
Most end up paying service fees for the filing help and end up receiving nothing in return. And if they do receive payment from the IRS, they can be in big trouble. Taxpayers will be held responsible for all funds fraudulently obtained from the IRS -- even if they were victims of the church tax scam themselves.
This could be a disastrous prospect for low-income and elderly individuals.
The IRS suggests consumers be on the lookout for these signs of scam:
- Handmade fliers
- Tax preparers who require no documentation
- Solicitation in church
- Reference to the American Opportunity Tax Credit, which is only available to those paying university expenses.
To avoid being victimized by the church tax scam, it's also wise to only use a tax preparer with which you are familiar or that has name recognition in the region. You can also call the free IRS tax hotline and ask whether you qualify for a rebate or credit.