Beware Tax Filing Scams
Refund Application Loans and Refund Anticipation Loans
- Steer clear of companies that promise you instant money or a down payment for a car, furniture or jewelry if you let them file your income tax return. What may look like a great deal could cost you much of your refund.
- Don’t be fooled by flashy ads or TV commercials. Instead of the instant refund or down payment offered, you get a very expensive Refund Anticipation Loan that could cost you more than a 200% annual interest rate. It pays to wait for the IRS to give you your check.
- If your return is prepared incorrectly and you do not receive the refund you anticipate, you will still owe the credit company for the loan made to you — and you could also OWE THE IRS!
Slavery Reparations - Don’t be a Victim of the Reparations Scam
There is no tax law that provides African-Americans tax credits or refunds related to slavery reparations.
- Don’t be tricked into filing slavery reparations claims. The only persons profiting from filing such claims are the promoters.
- If you allow such a claim to be filed in your name, you could be fined $500 by the IRS, especially if you refuse to withdraw the claim or file more than one claim.
- If you pay someone to file a federal income tax return to get reparations, you will lose what you paid and you will get NO REFUND!
You can get tax preparation help free
The Volunteer Income Tax Assistance (VITA) program offers free tax preperation services to individuals who generally make less than $54,000, or individuals with disablilities, or individuals who speak English as a second language.
You may also call 1-800-906-9887 for information on the nearest VITA (Volunteer Income Tax Assistance) site. If you are a senior, you can call 1-888-227-7669 for the nearest AARP tax aide site.
Guidelines for finding a reputable tax preparer:
- Permanent Office: Select a preparer who has a permanent office and will be available if your tax return is audited. Check out the preparer with the Better Business Bureau.
- Properly Trained: Select a preparer who is properly trained. Ask how recently the preparer took tax classes.
- Accurate Return: Avoid anyone who suggests that you lie or “fudge” figures. You will be responsible for the errors or lies—not the preparer. Anyone who promises you a bigger refund without knowing your tax situation could be misleading you. Make sure the preparer signs your completed return. Sign your return only after you look it over to make sure it is honest and correct. Don’t sign a blank tax return form or one done in pencil.
- Reasonable Fee: Ask how much the preparer charges and whether there are extra costs for additional forms or schedules before hiring the preparer.
- No Loan Solicitation: Do not consider a “refund anticipation loan” because the cost is too high.
Keep a copy of your return and proof that you submitted it to the IRS.
Contact Community Legal Aid Services if you have an income tax dispute.
Apply for help online by clicking here.
This handout is meant to give you general information and not to give you specific legal advice.
Prepared by Community Legal Aid Services, Inc. Info Updated: April 2012.