Tax Evasion Schemes, Abusive Trusts and other Bogus Tax Avoidance Scams
Tax evasion schemes, scams and cons are so common that the Internal Revenue Service has created a Tax Fraud Alert page on its Web site where you can find civil and criminal actions against promoters of schemes, info on the so-called "Slavery Reparation Scam," abusive trust schemes, employment tax enforcement program, phony tax preparers, and the Social Security refund hoax, among others.
Second Class Scammers
03/02 - Going under the names Dean and Bass and the Second Class Citizens' Committee, James Dean of Mobile suggested through his web site and toll free number that African Americans who had filed a federal tax return within the last three years could -- with a little help and a fee of about $150 -- now be due a rebate of $40,000 or more.
The advertised rebates were not reparations, he said, but refunds of "overpayments" on taxes that blacks had to pay during the century after the Civil War when they were often denied full civil rights.
Nonetheless, reparations claims began showing up on federal tax returns in the early 1990s prompted by scams which are aimed at milking the debate over whether government owes financial compensation to blacks as a consequence of slavery.
Such businesses tend to be clustered in the South, and their numbers appear to be growing according to the IRS who reported receiving almost 80,000 returns last year claiming more than $2.7 billion in false reparation refunds.
By the time victims discover their refund claims are rejected their money and the promoters are long gone.
The Justice Department has sued two men in Mississippi and Virginia, claiming the men had filed returns seeking fraudulent tax refunds of up to $500,000 per client.
Though not yet charged Dean acknowledges that he is now under investigation by both the Internal Revenue Service and the U.S. Postal Service.