Fake Tax Refund Scams A Trend, Justice Department Says


Justice Department lawyers are seeking to shut down a Huntington Beach, Ca., tax preparation service accused of attempting to obtain $15 million in fraudulent tax refund checks, reports the Christian Science Monitor. The tax preparers allegedly filed false Internal Revenue Service documents, including 1099 forms reflecting fictitious tax withholdings. The inflated, fictitious withholdings were then cited to justify the fraudulent refunds. The Justice Department says fake refund scams are a growing trend.

“Taxpayers thinking of participating in [such illegal schemes] should consider that, in addition to risking criminal prosecution, they also risk incurring civil penalties of as much as 20 percent of the amount of their bogus refund claim,” said John DiCicco, acting assistant attorney general for the Justice Department's tax division. Among other current tax frauds: obtaining taxpayer names and social security numbers for use in filing requests for tax refunds without their knowledge, and claiming a new home tax credit without actually purchasing a home.

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