April 16, 2007 2:41 PM PDT

IRS warns of online tax filing scams

If the stress of filing a tax return on time alone isn't enough, the Internal Revenue Service warns that online filers should be aware of "late tax" scams.

The scams lure taxpayers to Web sites that purport to offer free online tax filing services, but instead are set up to steal refunds, the agency said on its Web site late Friday. The IRS reminds people that only those services listed on its Web site are allowed to state that they are part of its "Free File Alliance."

"The final days of the tax season always bring tax scams," IRS Commissioner Mark Everson said in the statement.

The fraudulent Web sites accept tax information and actually submit the return through a legitimate free filing service, but the fraudsters change the taxpayers' bank account details to their own before filing, the IRS said. The IRS is working with the Treasury Inspector General for Tax Administration to look into the Web sites.

The IRS has partnered with 19 tax software companies for what's called the Free File program. Only those 19 companies are allowed to state that they are part of the Free File Alliance, which allows taxpayers with an adjusted gross income of $52,000 or less to electronically file their federal tax returns at no cost.

A greater number of taxpayers are expected to submit their returns online this year, according to the Consumer Internet Barometer. During the first quarter, nearly 39 percent of respondents to a survey said they planned to file their federal taxes online this year, up from 37 percent last year and approximately 28 percent three years ago.

The IRS recommends that taxpayers find a free file partner through its Web site. The deadline to file taxes is Tuesday.

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