Scam alert: Slavery is not tax deductible

Each year new tax scams emerge. One of the latest: telling African-American taxpayers that they can get tax credits as reparations for slavery.

The Internal Revenue Service received about 80,000 returns last year claiming $2.7 billion in reparations refunds, up from 13,000 the year before. The majority of the claims come from taxpayers in the South, but they have occurred in all parts of the country.

Here's the lure: Promoters, often using terms such as "black investment taxes," "reparations for African-Americans," or "black inheritance tax refund," charge an up-front fee, sometimes a percentage of the promised refund, and provide a fake tax form for claims that often seek between $40,000 and $80,000 from the government. They warn clients not to contact the IRS, saying the government doesn't want the general public to know. By the time the taxpayers discover their refund claims are rejected, the promoters have disappeared, along with their money.

Although the idea of slavery reparations has been increasingly debated recently, there is no law allowing the US government to pay reparations or give tax refunds for slavery. This spring, the IRS will send a letter to taxpayers who filed for the mythical reparations, giving them a chance to submit a corrected return with no penalty.

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