DETROIT – As the tax filing deadline approaches, the IRS released a warning about scams impacting Metro Detroit.
One of the biggest scams is identity theft, which accounts for 20 percent of all local investigations.
"Mr. Abdur-Rahman recruited a couple of friends and associates of his and what they were doing was, they established a tax preparation business. They opened up bank accounts and filed fraudulent returns of about $600,000," said Manny Muriel, special agent in charge IRS criminal investigation in Detroit.
Abdur-Rahman is now serving 18 months in prison.
Federal agents have been pursuing crime rings that use stolen Social Security numbers, resulting in a 50 percent drop in such crimes this year.
"Another great case we did here was the Sydney Dowl case and Angela Avery. These two were roommates. They conspired to file about 127 false tax returns with the IRS," Muriel said.
The pair stole half a million dollars before being busted. The ringleader, Dowl, was sentenced to 30 months in prison.
To avoid becoming a victim of a tax scam, be aware of warning signs, such as more than one tax return filed with your Social Security number or records showing income from an employer you never worked for. Also, beware if you owe more than expected or collection action has been taken.
Be careful about the person you choose to do your taxes as well. Paid preparers are required to sign forms. Never sign a blank return or one that is completed in pencil, and remember that you are legally responsible for all information on the form.
It is also a crime to falsify information on tax forms.
Phishing phone scams are also a problem. Thieves may call and pretend to be the IRS. The caller may state that a refund was mistakenly paid and needs to be returned.
"The twist is they'll ask for payment in either gift cards or they'll direct them to send the payment to one of the criminal's bank accounts, so one thing that's important to know is the IRS is not going to call you and demand payment," Muriel said. "Ask the person on the other end of the call to provide you with their employee identification number."
Muriel also noted that IRS agents will not threaten to arrest those who refuse to send payments when called. Such a threat indicates a phishing scam.
See the "Dirty Dozen" list of top tax scams here.