IRS Warns About Preparer Scam

The Internal Revenue Service is warning taxpayers about a scam in which people falsely are led to believe they can deduct from their income taxes money they have paid into Social Security through payroll taxes.

In the scam, a taxpayer is charged a “paperwork” fee of $100, plus a percentage of any refund received, by someone who then prepares a return claiming lifetime Social Security payroll taxes as a deduction.

“This is nothing more than a hoax designed to fleece the victims for the upfront fee,” said Ted Brown, IRS assistant commissioner for criminal investigation. “The law does not allow such a refund of Social Security taxes paid, and the IRS will contact taxpayers filing these claims.”

Taxpayers who believe they were subjected to the scam or who have any information about it can call the IRS at (800) 829-1040.

Airlines Fined: The Transportation Department fined Northwest Airlines Corp. $45,000 and Delta Air Lines Inc. $25,000 in accordance with federal law for failing to inform travelers seeking reservations that part of their trips would involve another carrier. Both airlines agreed to pay the fines without admitting any wrongdoing.

Cruising Online: Royal Caribbean will tiptoe into Internet ticket selling later this year by opening a Web site for direct sales. A spokesman for the cruise ship operator said the move would appeal mainly to veteran cruisers.