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

April 8, 2021

We recently shared a round-up of the top five scams the IRS reported for 2020. Since we’re coming into the most intensive months of the year for tax reporting, we think it’s important to keep these possible frauds top-of-mind. Now we’re presenting the last (but certainly not least) of the scams currently circulating that the IRS considers the most likely to put you at risk.

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

Senior Fraud
Seniors are more likely to be targeted and victimized by scammers than other segments of society – largely because they may be uninformed or easily persuaded. At the same time, they are becoming more comfortable with evolving technologies, such as social media. This gives scammers another means of taking advantage of them. Phishing scams linked to COVID-19 have been a particular threat this season.

Know that: Seniors, their families, and caregivers need to be on alert for a continuing surge of fake emails, text messages, websites and social media attempts to steal personal information.

Scams targeting non-English speakers
Phone scams pose a major threat to people with limited access to information, including those who aren’t entirely fluent in the English language. Commonly, the target gets a call from someone claiming to be with the IRS, threatening jail time, deportation or revocation of a driver's license. While they’re often "robocalls,” in some cases they may be made by a real person. The con artist typically has some of the victim’s information, such as their address, the last four digits of their Social Security number or other personal details, making the phone calls seem more legitimate.

Know that: The IRS doesn’t contact people in this way. Anyone who receives such a call should ignore the threats and not engage the scammers.

Unscrupulous Return Preparers
The person who prepares your tax return is entrusted with some very sensitive personal data. A few dishonest preparers pop up every filing season – committing fraud, harming innocent taxpayers or talking taxpayers into doing illegal things they regret later. One fraud that is booming is “ghost” preparers, who take payment for filing your taxes (either by mail or e-filing) but don’t sign the return. This is illegal.

Know that: Any paid preparer is required to fill in their name and Preparer Tax Identification Number (PTIN) on the return. With many tax professionals impacted by COVID-19 and their offices potentially closed, you need to take particular care this year in selecting someone to handle your tax filing.

‘Offer in Compromise’ Mills
Be wary of misleading tax debt resolution companies that can exaggerate your chances to settle tax debts for "pennies on the dollar" through an Offer in Compromise (OIC). These Offers, which help reduce tax bills, are available from the IRS to taxpayers who meet very specific criteria. Unscrupulous companies oversell the program to unqualified candidates in order to collect a hefty fee. These OIC "mills" churn out applications for a program most taxpayers are unlikely to qualify for. In Fiscal Year 2019, the IRS only accepted 18,000 of the 54,000 OICs submitted.

Know that: Individual taxpayers can use a free online Offer in Compromise Pre-Qualifier tool to see if they qualify. The simple tool allows taxpayers to confirm eligibility and provides an estimated offer amount.

Ransomware is malware designed to infect your computer, network or server. It is a form of invasive software that is often inadvertently downloaded when you click on a link. Once downloaded, it tracks keystrokes and other computer activity, looking for critical or sensitive data, which it then locks up with its own encryption. Victims generally aren't aware of the attack until they try to access their data, or receive a ransom request (usually in a pop-up window). Cybercriminals might use a phishing email or bogus website to trick you into opening a link or attachment containing the ransomware.

Know that: You should never click on any link you don’t recognize or can’t verify. You can also protect yourself by using the free, multi-factor authentication feature offered on tax preparation software products. This is a free and easy way to protect yourself from data thefts.

To see the first 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.

Read More Articles