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Scam targets child tax credit recipients

SNOQUALMIE VALLEY - The Internal Revenue Service (IRS) issued a consumer alert on June 18 warning taxpayers about a new scam targeting potential recipients of the Advance Child Tax Credit.

The IRS has seen isolated instances of this new scheme. A taxpayer receives a telephone call from a person who promises to speed up the payment of the tax credit check. The catch is the taxpayer must agree to a $39.99 charge to a credit card.

About 25 million taxpayers may be eligible for an advance payment of an increase to the Child Tax Credit. The Jobs and Growth Tax Relief Reconciliation Act of 2003 raised the Child Tax Credit to a maximum of $1,000 per child from $600 per child, beginning in 2003. The Act also provided for immediate tax relief by directing the Treasury to send this increase to taxpayers this year. Eligible taxpayers could receive up to $400 for each child claimed on their 2002 returns as an advance payment of their 2003 Child Tax Credit.

The IRS reminds taxpayers that no person or organization can "speed up" the payment of tax benefits. In reality, taxpayers do not have to take any action to get the new benefit. The Treasury Department and IRS will perform all the calculations and automatically mail a notice and a check to each eligible taxpayer, beginning the week of July 25.

"The only thing the taxpayer needs to do is cash the check," said Mark W. Everson, IRS commissioner. "If you qualify, we will send you a notice. There's no need to call, no need to apply, no need to fill out another form. The IRS will do all the work. A few days after the notice, you will get the check."

Under the new scam, the IRS is seeing the continuation of a trend that emerged earlier this year when the families of those serving in the armed forces were targeted. In both of these schemes, scam artists use current events to prey on unsuspecting victims. The scams also feature callers seeking credit card information to get taxpayers to pay for special benefits.

If the taxpayer agrees to the charge and provides a credit card number or other sensitive personal information, they could find a much larger charge to their account. By the time the taxpayer realizes something is wrong, the scam operator is long gone, possibly victimizing others.

Those who may encounter this latest tax scam or suspect tax fraud or abuse in some other situation can report to their nearest IRS office. When in doubt, seek help from the IRS or a tax professional. Call the IRS tax fraud hotline at (800) 829-0433.

Additional information on tax scams may be found on the IRS Web site, www.IRS.gov.

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