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Chapter 15. Scams > Slavery Reparations

Slavery Reparations

A particularly insidious tax scam that has been quite pervasive over recent years is the one in which promoters claim that for a fee they will aid African Americans in obtaining a substantial tax credit or refund as a reparation for slavery. This is totally false, although it has a tenuous historical basis. Following the end of the Civil War, Congress passed a bill authorizing the payment to all former slaves of forty acres and a mule as compensation for their enslavement. However, President Andrew Johnson vetoed the bill and it was never made into law.

People making a claim for slavery reparations on their federal income tax returns run the risk of being assessed a $500 penalty for filing a fraudulent tax return. In the past, the IRS has said that it would not assess this penalty unless a person had submitted the slavery reparation claim more than once after being informed that the claim was invalid. However, the IRS is now saying that it may assess the penalty against anyone who fails to withdraw a slavery reparations claim.


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