With more than 50% of taxpayers expected to receive a tax refund, it’s no surprise that everyone wants their share – and some, even more than their share.
This makes it appealing for scam artists to promise free money in the form of inflated refunds.
There are a number of variations on these refund scams but tops of the list are refunds based on fictitious Social Security benefits and false claims for education credits, the Earned Income Tax Credit (EITC), and the American Opportunity Tax Credit.
In addition to the trouble it may cause you to sort out the errors – and large fees paid to the scammers – you could be penalized for filing false claims or receiving fraudulent refunds.
Intentional mistakes of this kind can result in a $5,000 penalty.
Also a risk? The IRS has received complaints of scam victims who lost their federal benefits, such as Social Security benefits, certain veteran’s benefits or low-income housing benefits after filing tax returns with the IRS that provided false income amounts.