Tax Fraud - African-American Reparations Tax Scam

Tax deductions related to African-American Reparations are an urban legend. Making a claim like this on your taxes isn't legal!

Although based on somewhat distant facts, tax deductions based on reparations for African-American slavery are not legal. And yet this scam has been around for some time and misled may African-Americans for years. While it's accurate to say that right after the Civil War, the U.S. Congress voted to provide former slaves with 40 acres and a mule, President Andrew Johnson vetoed that bill.

Periodically politicians and various media discuss the reparations issue for descendants of African-American slaves; however there's no current tax law that allows for any slavery-related tax breaks.

This tax scam is used by corrupt promoters who persuade clients to pay them for preparing a claim (a misfiling of Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains) based on this type of invalid refund. These claims are a waste of money. Additionally, those who file subsequent claims can be subject to a $500 frivolous return penalty.

How to Report Suspected Tax Fraud Activity

The following information on how to report suspected tax fraud comes directly from the IRS website (www.irs.gov):

Suspected tax fraud can be reported to the IRS using IRS Form 3949-A, Information Referral. Form 3949-A is available for download from the IRS Web site at IRS.gov, or through the U.S. Mail by calling 1-800-829-3676. The completed form or a letter detailing the alleged fraudulent activity should be addressed to the Internal Revenue Service, Fresno, CA 93888.

The mailing should include specific information about who is being reported, the activity being reported, how the activity became known, when the alleged violation took place, the amount of money involved and any other information that might be helpful in an investigation. The person filing the report is not required to self-identify, although it is helpful to do so. The identity of the person filing the report can be kept confidential. The person may also be entitled to a reward.

Related Tax Fraud Links: