Melotic
02-06-2002, 07:06 AM
The scam involves bogus tax preparers who, for a fee, claim to be able to help African-Americans receive tax credits for slavery reparations. There is no such credit, the IRS says.
By J.J. Thompson
ASSOCIATED PRESS
TRENTON - Almost 600 people in New Jersey have been bilked by con artists who tell blacks they can receive money for a phony "slave reparations" tax credit.
Although the Internal Revenue Service has issued warnings nationwide about the scam, regional officials worry that many New Jerseyans are still unaware the tax credit doesn't exist.
The number of claims sent from state residents to the IRS dropped from 512 in July to 30 in August. But the filings increased to 51 in September, despite a summer-long campaign to warn people.
IRS spokesman Gregg Semanick said he's concerned that residents who heard they could file for the bogus tax credit have put off filing until the fall.
"We don't know if the public is aware of [the scam]," Semanick said.
The hoax usually involves an individual who claims to be a tax preparer and tells blacks they can receive credit for slavery reparations. For a fee ranging from $30 to $50, the tax preparer offers to fill out the forms and file the worthless claim.
In another version of the hoax, the person attaches a form listing thousands of dollars in tax withholding that never occurred.
The scammers usually advertise in predominantly black neighborhoods through word-of-mouth and crude fliers placed on telephone polls and cars.
Semanick said New Jersey's claims come from throughout the state, but most have been concentrated in the South Jersey towns of Millville, Vineland and Bridgeton.
People who send in the claims receive a warning from the IRS that the claim is baseless, and could be fined $500 if they try to refile them, Semanick said.
The state Division of Consumer Affairs is also investigating the hoaxes, said director Mark Herr.
"It's been on our radar screen since late spring, early summer," he said. "People complained to us they didn't get the tax refund they thought they would get."
Herr said his office has received 14 complaints so far.
The scam works because there have been calls by black leaders for reparations to be paid to the relatives of slaves, Herr said. The government's decision to make reparations to Japanese-Americans sent to camps during World War II lends the hoax some credibility.
The scammers also use dummy forms printed with the number of a real IRS form.
"[The form number] exists, but it doesn't get you a black tax deduction," Herr said. "It's easy to be led down the primrose path."
The executive director of the Black Ministers Council of New Jersey said he plans to ask ministers to warn congregations about the scam and encourage members to report any encounters to the police.
"It is racist, and it is an attempt to exploit poor folk," the Rev. Reginald Jackson said.
The IRS in Washington recently released another nationwide warning about the scam. Officials said IRS centers have received a growing number of the bogus slavery reparation claims this year, which also appeared in 1994 and 1996.
Officials are trying to prosecute those responsible. Last year a black Texas minister accused of talking three people into claiming "black tax" exemptions received two years in federal prison.
Last month the Florida attorney general obtained an injunction against a promoter who charged victims $100 to handle their claims. The promoter even warned consumers not to contact the IRS on the pretext that the agency didn't want the public to know about the tax credit.
"It is despicable that some are stealing from innocent people by charging fees to prepare what they know to be baseless claims," IRS Commissioner Charles O. Rossotti said in a statement.
By J.J. Thompson
ASSOCIATED PRESS
TRENTON - Almost 600 people in New Jersey have been bilked by con artists who tell blacks they can receive money for a phony "slave reparations" tax credit.
Although the Internal Revenue Service has issued warnings nationwide about the scam, regional officials worry that many New Jerseyans are still unaware the tax credit doesn't exist.
The number of claims sent from state residents to the IRS dropped from 512 in July to 30 in August. But the filings increased to 51 in September, despite a summer-long campaign to warn people.
IRS spokesman Gregg Semanick said he's concerned that residents who heard they could file for the bogus tax credit have put off filing until the fall.
"We don't know if the public is aware of [the scam]," Semanick said.
The hoax usually involves an individual who claims to be a tax preparer and tells blacks they can receive credit for slavery reparations. For a fee ranging from $30 to $50, the tax preparer offers to fill out the forms and file the worthless claim.
In another version of the hoax, the person attaches a form listing thousands of dollars in tax withholding that never occurred.
The scammers usually advertise in predominantly black neighborhoods through word-of-mouth and crude fliers placed on telephone polls and cars.
Semanick said New Jersey's claims come from throughout the state, but most have been concentrated in the South Jersey towns of Millville, Vineland and Bridgeton.
People who send in the claims receive a warning from the IRS that the claim is baseless, and could be fined $500 if they try to refile them, Semanick said.
The state Division of Consumer Affairs is also investigating the hoaxes, said director Mark Herr.
"It's been on our radar screen since late spring, early summer," he said. "People complained to us they didn't get the tax refund they thought they would get."
Herr said his office has received 14 complaints so far.
The scam works because there have been calls by black leaders for reparations to be paid to the relatives of slaves, Herr said. The government's decision to make reparations to Japanese-Americans sent to camps during World War II lends the hoax some credibility.
The scammers also use dummy forms printed with the number of a real IRS form.
"[The form number] exists, but it doesn't get you a black tax deduction," Herr said. "It's easy to be led down the primrose path."
The executive director of the Black Ministers Council of New Jersey said he plans to ask ministers to warn congregations about the scam and encourage members to report any encounters to the police.
"It is racist, and it is an attempt to exploit poor folk," the Rev. Reginald Jackson said.
The IRS in Washington recently released another nationwide warning about the scam. Officials said IRS centers have received a growing number of the bogus slavery reparation claims this year, which also appeared in 1994 and 1996.
Officials are trying to prosecute those responsible. Last year a black Texas minister accused of talking three people into claiming "black tax" exemptions received two years in federal prison.
Last month the Florida attorney general obtained an injunction against a promoter who charged victims $100 to handle their claims. The promoter even warned consumers not to contact the IRS on the pretext that the agency didn't want the public to know about the tax credit.
"It is despicable that some are stealing from innocent people by charging fees to prepare what they know to be baseless claims," IRS Commissioner Charles O. Rossotti said in a statement.