Many of you may have heard me talk about the various types of income tax fraud we’ve found committed by clients. It will be tax time again soon and I just want to pass on the types of fraud that we’ve found recently that you may want to look for.
1. Friend, neighbor, relative of an adult receiving TANF, claiming children, (that are not theirs), as their own dependents and receiving thousands of dollars in EIC credit. (TANF recipients are not allowed to claim their children. They’ve passed their children on to other people to claim and they split the EIC credit.)
2. Boyfriend or girlfriend claiming the other roommate as a dependent, even though they’re over 18 yrs old and receiving EIC credit.
3. Unmarried couple filing separately, each of them claiming relatives as dependents, that do not live with them. They received almost $3000 for EIC credit.
4. Claiming friends relatives as their own relative. They received EIC credit.
5. Client receiving IRS refund from H&R Block, but reporting they have no money, yet when we pull the transactions on their H&R Block debit card we find that they still have several thousand dollars unspent.
We have found that these types of fraudulent acts occur with or without professional tax consultants filing for them.
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