The IRS is warning people to be aware of a scam tempting them to file tax returns claiming fraudulent refunds. The scheme promises refunds to people who have little or no income and normally don’t have a tax filing requirement such as college students and senior citizens. Under the scheme, promoters claim they can obtain a tax refund or nonexistent stimulus payment based on the American Opportunity Tax Credit. The IRS has already detected and stopped thousands of these fraudulent claims. Nevertheless, the scheme can still be quite costly for victims. Promoters may charge exorbitant upfront fees to file these claims and are often long gone when victims discover they’ve been scammed. The IRS is reminding people to be careful because all taxpayers, including those who use paid tax preparers, are legally responsible for the accuracy of their returns, and must repay any refunds received in error.
To get the facts on tax benefits related to education, go to the Tax Benefits for Education Information Center on IRS.gov.