Scam artists prey on their victims all year long, but scam activity seems to spike during tax season. It must be “prime time” to snare victims because they are more abundant – everyone is preparing and filing their returns to meet the April 15 deadline. Scammers 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.
Since 2014, the IRS has announced its “Dirty Dozen” top tax scams. The top twelve for 2020 include 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 alerts to watch out for on the five tax-related scams highlighted by the IRS:
- Phishing: Taxpayers should be alert to potential fake emails looking to steal personal information. Don’t click on links claiming to be from the IRS, or any other sender you’re not expecting or that you do not know. Be wary of emails with embedded links or invitations to see or learn more − they may be nothing more than scams to steal personal information.
- 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.
- 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.
- 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 winter storms in Texas are examples where scammers take advantage of your compassion.
- EIP or Refund Theft: Refund fraud and theft remain a pervasive threat. In this past year, criminals also turned their attention to stealing Economic Impact Payments (EIP) as provided by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Scammers often defraud taxpayers by promising payments more quickly but divert the payments instead.
Don’t get caught up in one of these top tax scams while you are busy filing your 2020 income tax returns. To learn more about these scams and how to protect yourself, check out the IRS website at https://www.irs.gov/newsroom/irs-unveils-dirty-dozen-list-of-tax-scams-for-2020-americans-urged-to-be-vigilant-to-these-threats-during-the-pandemic-and-its-aftermath.
I hadn’t quite decided on this week’s blog topic when I saw an e-mail snagged in my spam folder. The sender was “IRS”. The heading was “Second Notice of Delinquent Taxes”. What a gift! A blog topic!
Like many taxpayers who receive a message from the “IRS” dunning them for cash, I knew that I didn’t owe the IRS anything. Thankfully, I knew better than to open or reply to it. Keep reading to know how to identify phishing, and what to do when it happens to you.
1. What is phishing?
Phishing is a scam usually done through unsolicited email and/or websites that pose as legitimate senders or sites. Scammers use phishing to lure unsuspecting victims to provide personal and financial information. Bogus emails can appear to come from the IRS or your tax professional requesting information, including mother’s maiden name, passport and account information that is used to steal your identity and assets.
- How do I know if it’s phishing or really the IRS?
The easiest way to check for phishing is to place your cursor over the sender’s name, revealing the sender’s e-mail address. An address that doesn’t look legitimate is probably a scam. For the IRS, anything other than “irs.gov” is suspect. The IRS doesn’t initiate contact with taxpayers by email, texts or social media to request money or financial information. Most IRS communication is still through the good, old-fashioned USPS.
- What should I do with a phishing e-mail claiming to be from the IRS?
If you receive an email claiming to be from the IRS that contains a request for delinquent tax balances or financial information, immediately do the following:
- Don’t reply.
- Don’t open any attachments. They can contain malicious code that may infect your computer or mobile phone.
- Don’t click on any links. Visit the IRS’ identity protection page if you clicked on links in a suspicious email or website and entered confidential information.
- Forward the email as-is to the IRS at [email protected].
- Delete the original email.
Don’t get phished! When you get an e-mail that looks suspicious or is from an unfamiliar sender, stop and check it out before deciding to open it. If it’s phishing for your tax dollars, don’t even think about opening it! Just forward to [email protected] and delete!
It’s still happening. It happened to me just last week. I came home to a voicemail telling me that four warrants are out for my arrest and I need to pay up or turn myself in. Of course, the caller conveniently provided a callback number. The caller also sounded automated. Who would fall for that? You might be surprised…
Hundreds of unsuspecting taxpayers are still being defrauded of thousands of dollars. Otherwise, the scam callers would stop. It wouldn’t be worth their time. Taxpayers should not take the bait and fall for this trick. But it can be really intimidating to get a threatening call about what is already a scary topic – your taxes.
Four tips to help taxpayers avoid getting scared enough to become a scam victim:
- The IRS initiates most contacts through regular mail delivered by the United States Postal Service.
- The real IRS will not:
- Call to demand immediate payment
- Call someone who owes taxes without first sending a bill in the mail
- Demand tax payment without allowing the taxpayer to appeal the amount owed
- Require a taxpayer to pay in a certain way, such as with a prepaid debit card
- Ask for credit or debit card numbers over the phone
- Threaten to bring in law enforcement to arrest a taxpayer who doesn’t pay
- Threaten a lawsuit
- Special circumstances when the IRS will come to a home or business include:
- When a taxpayer has an overdue tax bill
- When the IRS needs to secure a delinquent tax return or a delinquent employment tax payment
- To tour a business as part of an audit
- As part of a criminal investigation
- IRS Revenue Agents who may conduct a visit to a taxpayers home or business carry two forms of official identification that have serial numbers. Taxpayers can check both IDs. Revenue Agents conducting audits may call taxpayers to set up appointments, after having first notified them by mail. By the time the IRS visits a taxpayer at home, the taxpayer would be well aware of the audit.
Have you been called or visited by someone impersonating the IRS? Don’t be scared or intimidated. Hang up the phone and visit IRS.gov for information about how to detect and report tax scams.
Phone and e-mail scams are a hot topic these days. Many of us have received one of those threatening calls. Some scammers even pose as IRS agents. Recently, the IRS and state tax agencies alerted employers to an insidious scam to “phish” for W-2 payroll information and steal employees’ identities.
This W-2 email phishing scam has evolved beyond the corporate world and is spreading to other sectors, including schools and nonprofits. The W-2 scam is a “twist” on the old scheme where scammers phish for wire transfer instructions by sending an e-mail to accounting staff. Some organizations have been caught in both scams and lost twice.
The IRS Commissioner, John Koskinen, stated: “This is one of the most dangerous email phishing scams we’ve seen in a long time. It can result in the large-scale theft of sensitive data that criminals can use to commit various crimes, including filing fraudulent tax returns.’’
Here’s how the scam works: Cybercriminals disguise an email to make it appear to be from an organization executive. The email is sent to an employee in the payroll or human resources department, requesting a list of employees and their Forms W-2. This scam first appeared last year and is circulating again this tax season. Businesses that were hit last year are reportedly being phished again this year.
What to do if your organization gets phished? The IRS wants employers to report W-2 thefts immediately at https://www.irs.gov/uac/report-phishing so they can take steps to help protect employees from tax-related identity theft. Report all unsolicited email claiming to be from the IRS or an IRS-related function to [email protected].
Bottom line? Don’t get phished! Verify the e-mail sender before clicking on a link or providing any information.
Scam artists making threatening calls to taxpayers have been all over the news. Now it seems the thieves are scamming unsuspecting taxpayers via email by sending fake IRS notices. The IRS recently alerted taxpayers and tax professionals to be on guard against fraudulent emails with an attached fake tax payment notice.
Taxpayers may get a written notice in the mail if information reported on her or his tax return does not match the information received by the IRS from a third party, like a bank or employer. The standard, computer-generated notice, called a CP2000, routinely asks for payment or an explanation from the taxpayer.
Scammers created a scheme sending fake CP2000 notices via email for the 2015 tax year. The fraudulent CP2000 notice includes a payment request to mail a check made out to “I.R.S.” to the “Austin Processing Center” at a Post Office Box address. This is in addition to a “payment” link within the email itself.
In its alert, the IRS emphasized four indicators of a fraudulent tax notice:
- These notices are being sent electronically, even though the IRS does not initiate contact with taxpayers by email or through social media platforms.
- The CP 2000 notices are issued from an Austin, TX, address not used by the IRS.
- The underreported tax issue is related to the Affordable Care Act (ACA) requesting information regarding 2014 coverage.
- The payment voucher lists the letter number as 105C.
Receive one of these scam emails? The IRS asks that you forward it to [email protected] and then delete it from your email. To determine if a CP2000 notice you received in the mail is real, see IRS information, Understanding Your CP2000 Notice, which includes an image of a real notice.
You’ve heard this advice before, but here it is again: Always beware of any unsolicited email purported to be from the IRS or any unknown source. Never open an attachment or click on a link within an email sent by unknown sources.