Circuit Breaker Credit Department of Revenue

The state Department of Revenue is warning about unscrupulous tax preparers that officials say have been promising poor Boston seniors a piece of a tax rebate program that has brought $60 million to the Bay State — even if they aren’t eligible.

Last week, the state launched an aggressive review of its so-called “Circuit Breaker” tax credit program that is aimed at homeowners. About 78,000 seniors have received the benefit. But dozens and possibly hundreds of elderly taxpayers who are not eligible for the program have paid $50 application fees, only to find out later they have to return the payments and might even face penalties, according to state officials and social service workers.

“Obviously, somebody here is bamboozling seniors,” DOR spokesman Robert Bliss told the Herald. “They are hearing about something that is too good to be true, but believe it to be true nonetheless.



“We want to make sure it hasn’t spread to other places,” Bliss said. “It might seem like an overabundance of caution, but we are dealing with taxpayer money here, so we think it’s warranted.”

This year, the program has sparked huge interest in Boston’s poorest neighborhoods, but some applicants have been public housing residents, who as non-homeowners are not eligible for the credit.

The tax credit — called the “Circuit Breaker” because it is triggered by an overload of property taxes relative to income — is aimed at elderly Bay State homeowners with limited incomes whose tax bills keep climbing. Low-income homeowners 65 and older, who can prove real estate taxes eat up at least 10 percent of their annual income, can receive as much as $970 a year from the state.

Mary Murray, 69, a renter in the South End, said that she paid a tax preparer $50 to receive a credit of $378, but later got a demand notice from the state tax collection agency.

“I’m paying the money back, because I don’t want any part of this,” Murray said.

“It’s a wonderful tax credit,” said John Drew, chief executive of Action for Boston Community Development — the Boston nonprofit that blew the whistle on the exploitation scheme. He said his agency fills out the applications for free.

“We’ve been told that tax preparers are going to Boston Housing Authority properties, where no one is eligible for the tax credit, and telling them that President Obama has stimulus checks for them,” Drew said.

For people who actually qualify, he said, “We want more people to apply for it, because we want to get more income into households that really need it.”