Phone Tax Credit Refund Abuse
Tip It!Hmmm… This is interesting. Remember the telephone tax credit that I wrote about the other day? Well, it seems that people have been abusing it and asking for way too much money back. According to IRS commissioner Mark Everson:
“While the vast majority of taxpayers are claiming the telephone tax refund correctly, we are seeing some clear abuse involving overstated refund requests. People requesting an inflated amount will likely see their refund frozen, may have their entire tax return audited and even face criminal prosecution where warranted.â€
Ouch! Based on a sample of refunds that were filed during January, the IRS says that some taxpayers have requested a refund of the entire amount of their phone bills, as opposed to just the 3% tax to which they’re entitled. Others have requested thousands of dollars, which translates into total phone bills of over $100k — in some cases, this is more than their total income. Talk about sending up a red flag!
[Source: IRS.gov]
Published on February 23rd, 2007 - 4 Comments
Filed under: Taxes
About the author: Nickel is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!
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February 23rd, 2007 at 11:01 am
Definitely not the smartest people. I just wonder how many of them are doing it intentionally, or are just dumb.
February 27th, 2007 at 1:01 pm
I just took the standard rebate provided in the table in the 1040 instructions. It’s based on the size of your household. It wasn’t worth digging through 3 years of reciepts to calculate and actual figure. And it’s definitely not worth increasing your odds of being audited!
March 1st, 2007 at 10:28 am
on the other side of the coin, a lot of people aren’t claiming the refund either – missing out on free money