Tax Guru-Ker$tetter Letter
Monday, January 28, 2002
Phony Black Tax Credits
For a number of years, I have been debunking the urban myth floating around about the supposed black tax credit of $40,000. This question comes up at least once a week on the tax question boards that I monitor.
Finally, IRS has succeeded in prosecuting one of the promoters of this scam, sending a Texas man to prison for 78 months. He is also required to reimburse the government for the $1.2 million of bogus credits that it accidentally paid out.
Maybe I have a twisted perspective on this; but I think it's ludicrous that IRS personnel are so sloppy that they would actually pay out over a million dollars in completely bogus tax refunds. Have a digit wrong in a Social Security number and IRS dings you. Claim an imaginary $40,000 tax credit on a form that has nothing to do with you, and IRS cuts you a check. Missing the big picture?