The Top Ten Ways Scammers are Making Tax Time Even More Taxing (Part One)

March 19, 2021

They say nothing can be said to be certain, except for death and taxes. But you can add a third item to that list: scammers. The IRS reports they've been more active than ever; taking advantage of the changes brought by COVID-19 such as financial insecurities and, in particular, the stimulus payments. 

That makes March an excellent time to review the IRS list of 2020’s most popular scams, as we start to think about 2021 filing. Many are variations on other schemes (such as email phishing) and some are unique to tax time and/or the pandemic.

Here are the first five of the IRS Top-Ten Scams for 2020:

Phishing
IRS Criminal Investigation has reported a huge uptick in phishing schemes utilizing emails, letters, texts and links. Scammers will reach out with a variety of messages with one bottom line: to get you to supply personal identifying information or financial account information, like account numbers and passwords. Most of the new schemes actively play on pandemic fears and stimulus payments, often employing keywords such as "coronavirus", "COVID-19" and "Stimulus”.

Know that: You should never click on links claiming to be from the IRS. The IRS will never initiate contact with taxpayers via email about a tax bill, refund or Economic Impact Payments.

Fake Charities
Criminals exploit natural disasters and other situations (such as the COVID pandemic) by setting up fake charities to steal from well-intentioned people who want to help. These stings usually start with an unsolicited contact by telephone, text, social media, e-mail or even in-person. Scammers may set up bogus websites using names similar to legitimate charities, or claim to be working for or on behalf of the IRS to help victims file loss claims and get tax refunds.

Know that: You should be particularly wary of charities with names similar to nationally known organizations. Legitimate charities will provide their Employer Identification Number (EIN), which can be used to verify their legitimacy. Taxpayers can find legitimate and qualified charities with the search tool on IRS.gov.

Impersonator Phone Calls
IRS impersonation scams come in many forms. Claiming to be an IRS representative, the fraudster will commonly try to get you to act quickly by threatening arrest, deportation or license revocation if you don’t pay a bogus tax bill. These are often phone scams or "vishing" (voice phishing), and many are "robocalls”, a text-to-speech recorded message with instructions for returning the call.

Know that: The IRS will never demand immediate payment from you, nor threaten, ask for financial information over the phone, or call about an unexpected refund or Economic Impact Payment.

Social Media Scams
Social media scams use your own interests to trick you into sharing personal information via social media – where anyone can then access it. They do this by convincing you that you’re dealing with someone close to you whom you trust. You might receive a text or email with a link to something that interests you, but which contains malware intended to commit more crimes. The scammers may also use your contact list to go after your friends and family with fake messages that appear to be from you.

Know that: Anything you post on social media is public and can be used to target you with personalized messages specific to your interests or friends. Be careful with what you make public, and always double-check any ‘iffy’ messages or requests for money.

EIP (‘Stimulus Payment’) Theft
Criminals have turned their attention to stealing Economic Impact Payments provided by the Coronavirus Aid, Relief, and Economic Security (CARES) Act – known to most of us as stimulus money. Criminals may file false tax returns or supply other bogus information to the IRS to divert refunds to wrong addresses or bank accounts.

Know that: Your EIP belongs to you and not any caregiver or care facility. It cannot be used to determine eligibility for Medicaid. If you have any questions about receiving your EIP, you can consult the Coronavirus Tax Relief page of IRS.gov for assistance. Anyone who believes they may be a victim of identity theft should consult the Taxpayer Guide to Identity Theft on IRS.gov.

To see the next five of top 10 IRS-reported scams, click here.

 

This article is designed to provide informative material and is distributed with the understanding that it does not constitute legal or other professional advice. Opinions expressed herein are subject to change without notice. Information has been obtained from sources believed to be reliable, but its accuracy and interpretation are not guaranteed.


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