There’s a new income tax scam you should be aware of.  The IRS is warning taxpayers, especially senior citizens, to beware of a scheme tempting them to file tax returns claiming fraudulent refunds.

The scheme promises tax refunds to people who have little or no income and normally don’t have a tax filing requirement.  They claim they can obtain a tax refund or nonexistent stimulus payment based on the American Opportunity Tax Credit.

The IRS has seen a surge of these scam from all across the United States. They are aggressively investigating the source of the scheme

“This is a disgraceful effort by scam artists to take advantage of people by giving them false hopes of a nonexistent refund,” said IRS Commissioner Doug Shulman. “We want to warn innocent taxpayers about this new scheme before more people get trapped.”

In many of these cases, con artists are targeting seniors, people with very low incomes and members of church congregations, with promises of free money. They claim refunds are available even if the victim went to school decades ago.

The IRS has already detected and stopped thousands of these fraudulent claims. Nevertheless, the scheme can still be quite costly for victims. Promoters may charge exorbitant upfront fees to file these claims and are often long gone when victims discover they’ve been scammed.

Taxpayers need to remain vigilant regarding tax schemes.

A Brooklyn man who ran a tax preparation business in Flatbush was sentenced last week in Brooklyn federal court to two years in prison for defrauding the IRS.

Remy Milien, who owned and operated the Maximum Refund tax return preparations company, fabricated people’s tax returns without their knowledge so as to make his services more attractive to his customers.

Between the years 2000 and 2002, Milien defrauded the U.S. government of an estimated $200,000 to $400,000 by listing false tax deductions on the returns of his customers, as well as on his own forms.

He was sentenced before Judge Edward R. Korman to two years in prison last week, after pleading guilty in 2007 to 21 counts of fraud in U.S. District Court for the Eastern District of New York, located on Cadman Plaza East in Downtown Brooklyn.

The IRS determined the extent of Maximum Refund’s fraudulent operations after analyzing tax return forms that passed through its office and interviewing some of the taxpayers, as well as sending an undercover agent to Maximum Refund to have a tax return prepared.

Milien, without asking the agent for any relevant information, prepared a fraudulent tax return form with fabricated deductions. Thus, investigators determined that he was performing these illegal operations without the knowledge of the taxpayers he represented, some of whom may face unanticipated tax debt and audits.

Maximum Refund processed over 2,000 tax returns in total — almost of all of them for low-income individuals. These sorts of crimes are difficult for the IRS to prosecute because they consist of consistent small-scale frauds by third-party tax preparers that aggregate into large-scale fraud after hundreds of repetitions.

Milien fabricated tax deductions on the 1040 income tax returns for his customers — for example, gifts to charity, job expenses, gambling losses and medical expenses. A majority of the returns claimed itemized deductions in excess of 50 percent of the taxpayers’ adjusted gross income, according to court documents.

As Milien performed much of this fraud without the knowledge of his customers, presumably he was trying to make his business more popular by offering customers impossible and illegal savings on income tax.

A close analysis of 26 returns by the IRS revealed that Milien’s fraudulent claims lost the IRS roughly $58,000, which he now owes in restitution. Furthermore, upon analyzing 125 more tax returns processed by Maximum Refund, the IRS found additional losses of over $200,000 in fraudulent claims on more than half of the forms.

Milien’s requests in court for a lower sentence based on his low risk of recidivism were dismissed by prosecutors, as they argued that while he was charged with several counts of fraud, he actually committed these same crimes hundreds of times.