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!