In New Scam, Shady Tax Preparers Target People Without Health Insurance
Spanish speakers are particularly vulnerable, the IRS says
In case there weren’t enough tax-related scams to worry about, with IRS impersonators calling consumers on the phone demanding money, here’s a new addition, this one involving unscrupulous tax preparers.
These shady "professionals" target clients who don't have health insurance, instructing them to pay penalties called for under the Affordable Care Act directly to them, according to the IRS. They then pocket the money.
The IRS says these fraudulent tax preparers have been preying on people who don’t speak English well, especially those whose first language is Spanish.
In some cases, clients didn’t even owe money because they had insurance through Medicaid or other health coverage.
“If you owe a payment, remember that it should be made only with your tax return
or in response to a letter from the IRS. The payment should never be made
directly to an individual or return preparer,” according to a press release
from the IRS.
Related: 7 Tips for Filing Your Taxes Safely
The IRS says tax preparers who ask for these payments may use a client’s immigration status as a reason they have to pay the preparer rather than the IRS. The truth is quite the opposite. If someone is not a U.S. citizen they may be exempt from the penalty, also known as a shared responsibility payment.
“If you are not a U.S. citizen or national, and are not lawfully present in the United States, you are exempt from the individual shared responsibility provision and do not need to make a payment,” the IRS says.
The IRS tried to regulate tax-return preparers in the past, requiring them to pass certification tests, pay annual fees and take continuing education classes, the New York Times reports. But the rules were struck down. According to the New York Times:
“In 2014, the United States Court of Appeals for the District of Columbia Circuit struck down the rules, saying the agency had no authority to adopt them. As a result, the IRS said, some tax professionals who had been suspended or disbarred in disciplinary proceedings have again been allowed to prepare tax returns for consumers.”
If you believe you’ve been victimized by a tax preparer, the IRS says to file Form 14157 to lodge a complaint.
As for choosing a tax payer, the IRS recommends using its searchable directory of tax preparers who currently hold professional credentials recognized by the IRS. For more information on choosing a preparer, filing a complaint or using that directory, visit the IRS's Choose a Tax Professional page.
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