2002-02-09 / Front Page

IRS Issues Alert On "Reparations" Scam

By Gary G. Toms

By Gary G. Toms

It seems that a number of African-Americans across the country are being mislead about alleged entitlements and credits from the Internal Revenue Service as they file taxes this year. As a result, the IRS has issued a warning to the public about an ever-growing tax scam, which seeks to capitalize from the reparations-for-slavery controversy.

A recent editorial that appeared in Newsday stated, "Whatever the size of this nation's debt to African-Americans, filing slavery reparations claims to the Internal Revenue Service won't get them any compensation. There is no "black tax credit" or "black inheritance tax refund." Anyone selling advice on how taxpayers can file such claims is a shameless crook trying to make the most of the tax-filing season."

The IRS has issued repeated warnings about the growing scam, but they still have received close to 80,000 tax returns last year that claimed more than $2.7 billion in false reparations.

While 45 percent of the clams were from the states served by the IRS Atlanta center, the level of gullibility has no particular boundary in terms of geography. About 12 percent of the claims were filed at the IRS's Brookhaven Service Center on Long Island. That facility covers the New York metro area, New Jersey and Delaware.

To make matters worse, the con artists involved, who are generally charging a flat fee or percentage of the refund claimed, target members of the African-American church organizations. The IRS has reached out to church organizations across the country in an effort to warn pastors of the potential danger.

The IRS is urging taxpayers to avoid any preparer who tells them not to ask the IRS about the credit, based on the accusation that the government doesn't want the general public to know about the "entitlement."

The scam has been so successful that similar claims are being submitted for Native-American reparations.

The IRS will enact more stringent policies this year for filing, and letters will be issued to the public alerting them to the fact that there are no laws allowing these claims. Anyone who disregards the letter, and decides to try and benefit from the scam, is subject to a $500 penalty for filing a false claim.

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