IRS Warns of Phony Tax Scheme Abusing the American Opportunity Tax Credit

The IRS warned taxpayers today to be aware of a new scam targeting senior citizens and other taxpayers.  As part of the scam, taxpayers are encouraged to file returns claiming the American Opportunity Tax Credit.  The scammers mislead these taxpayers into believing that they are eligible to claim the credit, even if they don’t meet the credit’s requirements.

The intent is to generate bogus refund checks for taxpayers.  Scammers often charge large upfront fees, with the promise that taxpayers will later receive large refund checks.  By the time the deception is uncovered, the scammers are usually long gone.  Taxpayers are out the upfront fee they paid and are left to clear up the resulting tax mess.

Learn more about tax scams from the IRS here.

A word of warning: as with most things in life and tax – If it sounds too good to be true, it probably is.

IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the Internal Revenue Service, we inform you that any U.S. tax advice contained in this communication is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication.