IRS Warns of Slave Reparation Scams
W A S H I N G T O N, Oct. 6 -- Scam artists are bilking blacks nationwide bycharging them for information about a phony “slave reparation”tax credit, the latest in a line of schemes dealing with money fordescendants of slaves, federal officials said today.
The Internal Revenue Service said its tax centers nationwide allhave received thousands of slave reparation-related claims in thelast few months. But because there is no law allowing reparations,the IRS rejects the claims.
The claims are prompted by scam artists, who charge money forthe false information on how to file the claims.
“It’s despicable that some are stealing from innocent people bycharging fees to prepare what they know to be baseless claims,”IRS Commissioner Charles Rossotti said.
Prosecuting a HoaxThe scam comes in two forms, IRS officials said. In one, theperson tells blacks to claim a credit for black investment taxes orreparations. In the other, the person tells black taxpayers toattach a form listing thousands of dollars in tax withholdings thatnever occurred.
Officials are trying to prosecute the promoters of the scam,Rossotti said. In 1999, a black Texas minister got two years infederal prison for talking three people into filing tax returnsclaiming “black tax” exemptions.
In Florida last month, authorities got an injunction against aMiami-based promoter who was charging victims $100 to process theirclaims.
Part of the scam including a warning not to call the IRS tocheck the claim, because the federal government did not want thegeneral public to know about the tax credit.
“Promoters do not want potential victims to learn the truthabout this hoax,” Rossotti said.
Beware False Tax Charges
IRS officials say people who repeatedly filed for reparationclaims, even after receiving a denial notice from the IRS, could befined $500 for filing false tax claims.
This is not the first appearance of this type of scam, officialssaid.
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