Consumer Alert: IRS Social Security Scam

Kansas Attorney General Paul Morrison warned Kansans today of a new scam targeting the elderly. Seniors are encouraged to contact the Attorney General’s Office if anyone contacts them regarding an income tax return on their Social Security benefits.

According to the Social Security Administration (SSA), scam artists are approaching seniors across the country and offering to prepare tax refunds for Social Security benefits. The victim is instructed to get a 1099 statement for the last three years from Social Security. The SSA has no choice except to provide this information to beneficiaries, although they have been warning anyone who requests this information about the scam.

Once they receive the information, the scam artist prepares three years of tax returns for a fee. The returns show Social Security benefits as income and mistakenly take the standard deduction to create a refund amount. The beneficiary files the faulty tax return and receives a refund from the IRS.

Once the IRS realizes the error, the refund is either removed from the beneficiary’s bank account or the IRS sends a demand letter for the refund amount. By that point, the scam artist has moved on and the beneficiary is out the $40 to $100 they paid to prepare the return.

For more information on this scam visit: http://www.ssa.gov/. For information on other consumer scams and alerts, visit the Attorney General’s Web site at www.ksag.org.

Source: Kansas Attorney General