Tax filing season officially started last Monday. The race to meet the April 18 deadline is on! Scammers are on a deadline, too. Scam artists prey on their victims all year long, but cybercrime activity seems to spike during tax season. They just can’t resist all those opportunities to fool or intimidate taxpayers who are in the middle of an unpleasant task that makes them nervous and vulnerable, especially online. Consequently, the IRS advises taxpayers to be on Scam High Alert during this filing season.
Since 2014, the IRS has issued an annual list of the “Dirty Dozen” top tax scams. The list is based on actual scams reported to its investigative and law enforcement units. The top twelve for 2021include five scams that are more likely to occur during tax season, targeting taxpayers with malicious intent to steal their refunds, bank account number, or personal information.
Here are five of the 2021 tax-related scams highlighted by the IRS:
- Fake Charities:
Criminals frequently exploit natural disasters and other times of crisis by setting up fake charities to steal from well-intentioned people trying to help in times of need. Unfortunately, this is nothing new. The current COVID-19 pandemic and recent natural disasters are examples where scammers take advantage of your compassion.
- Immigrant and Senior Fraud:
IRS impersonators and other phone scammers are known to target vulnerable people, like those with limited English proficiency and senior citizens. These scams are often threatening in nature, like where a taxpayer receives a telephone call threatening jail time, deportation, or revocation of a driver’s license from someone claiming to be with the IRS.
3. Offer in Compromise Mills:
Misleading tax debt resolution companies can exaggerate the chance to settle tax debts for “pennies on the dollar” through an Offer in Compromise (OIC) for a hefty fee. Later, the taxpayer learns that she or he is not one of the small number of individuals who are qualified to even apply for an OIC, after the fee is paid and it’s too late.
4. Unscrupulous Return Preparers:
Most tax professionals provide honest, high-quality service, but dishonest preparers pop up every filing season. They commit fraud, harming innocent taxpayers, or talk taxpayers into doing illegal things, like inflating deductions. These scammers may also have taxpayers deposit refunds into tax preparer accounts.
- Unemployment Insurance Fraud:
Unemployment fraud often involves individuals acting in coordination with or against employers and financial institutions to get state and local assistance to which they are not entitled. These scams include submitting fraudulent applications and using stolen or fake identification information to perpetrate an account takeover.
The IRS helps taxpayers to be on Scam High Alert all year round, but especially during tax filing season, by issuing its annual “Dirty Dozen” top tax scam list. To learn more about these scams for the 2021 filing season, check out the IRS website at https://www.irs.gov/newsroom/irs-dirty-dozen-list-warns-people-to-watch-out-for-tax-related-scams-involving-fake-charities-ghost-preparers-and-other-schemes.