Phone tax refund fraud
WASHINGTON (AP) -- IRS criminal investigators this week conducted raids in seven cities, including Miami, to shut down tax preparation businesses suspected of abusing a one-time telephone tax refund.It doesn't surprise me there are some disreputable preparers who are filing false returns. I read such stories at least twice a month, here is the latest example. It's just been my experience from doing taxes for 17 years that IRS doesn't react this quickly. These people must be pretty brazen in the returns they are filing to get a response only a month into tax season.
The Internal Revenue Service, in a statement Friday, said some tax-return preparers are requesting thousands of dollars of refunds for clients despite IRS pronouncements that the tax break should be in the $30 to $60 range.
"We have seen limited but serious instances of abuse, and we've sent in criminal investigators to pursue the matter accordingly," IRS Commissioner Mark W. Everson said.
Investigators served search warrants at tax preparation businesses in Atlanta; Dallas, Tyler and Athens, Texas; Riverside, Calif.; Miami; and New Orleans. Agents temporarily closed businesses, seizing computers and documents to be used as evidence.
The tax agency said that IRS auditors also are visiting tax preparers across the nation who are seeking questionable telephone tax refunds. The agency is advising taxpayers to stay away from preparers making exaggerated claims about refunds.
In several instances, it said, taxpayers have put in for a refund of $30,000, while others are requesting refunds for the entire amount of the taxpayer's phone bill, rather than just the 3 percent long-distance tax.
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