I’ll be the first to admit that the Tax Code is filled with crazy acronyms – like FBAR, EITC, and AGI – and convoluted titles (my current favorite is “IRS Facilitated Self-Assistance”). In fact, the Tax Code and the IRS tend to be painfully over descriptive when naming credits, deductions, and the like.

What you won’t see in the Tax Code – or in the IRS Regs – are titles of credits and deductions that have absolutely nothing to do with the actual credit or deduction. So don’t believe anyone who tells you that you can claim a credit, like a college credit, for doing something completely unrelated. Apparently, there are a number of schemes making the rounds right now in an attempt to convince taxpayers differently. Most of them are targeted to senior citizens and are related to college credits.

*Spoiler alert* You have to actually attend college to claim a college-related credit.

Anyone who is telling you different is lying. You can’t get a refund based on the American Opportunity Tax Credit if you’re not enrolled in or paying for college.

The IRS has been cracking down on this scheme in recent weeks, with IRS Commissioner Doug Shulman saying:

This is a disgraceful effort by scam artists to take advantage of people by giving them false hopes of a nonexistent refund. We want to warn innocent taxpayers about this new scheme before more people get trapped.

My favorite variation? The IRS has reported that a version is making the rounds touting that the college credit is available to compensate people for paying taxes on groceries. Yes, groceries. The two are in no way related. Trust me. I went to a lot of years of college and could barely afford to buy groceries. The only way to get the college credit is to attend and pay for college.

Also important to understand for 2012? There is no stimulus payment or rebate check coming your way. Nada. Zip. Nothing. And there’s nothing you can do to conjure one up – not going to college, not working from home and not simply aging. There’s nothing special for churchgoers and you’re not going to be compensated with a check in lieu of the Making Work Pay Credit. Don’t believe anyone who says otherwise.

Be smart. You don’t get a pass from IRS if you fall victim to one of these scams. You will have to pay back any refund that you might receive as a result of these scams if you get caught. You will likely also be subject to penalty and interest which can add up pretty quickly.

Here’s my rule of thumb: if it feels too good to be true, it probably is. So run away – fast – from anyone telling you that you can collect a paycheck from IRS for doing nothing. If that were true, you’d see it in my column… and I’d be standing in line next to you.

Print Friendly, PDF & Email

Kelly Erb is a tax attorney, tax writer and podcaster.

Write A Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.