IRS’s “Dirty Dozen Tax Scams” During the Coronavirus Pandemic

The Internal Revenue Service has released a list of its “Dirty Dozen Tax Scams,” as scamming typically escalates during a crisis like the novel coronavirus pandemic. Anyone targeted or duped by scams should speak to a tax attorney or the IRS directly. Below are the scams used most often during an economic crises, such as this pandemic.

Phishing

Emails or pop-ups requesting personal information concerning a tax bill or economic impact payment should be ignored as “phishing” scams. The IRS never initiates contact with taxpayers via email.

IRS Impersonators

IRS impersonation scams are common. Thieves posing as IRS representatives make threatening phone calls to unsuspecting taxpayers and try to instill urgency and fear. They demand immediate payment for supposedly delinquent taxes. In reality, the IRS doesn’t ask for personal information or demand instant payment over the phone. Taxpayers who receive such calls should contact the IRS agency directly.

Fictitious Charities

Criminals often create fake charities to steal from well-intentioned individuals looking to make donations. The scammers call or email, pretending they’re working on the IRS’s behalf to help people with refunds and claims. Taxpayers looking to donate are better off searching for legitimate charities on IRS.gov.

Harvesting Social-Media Data

People may receive Facebook messages or emails from individuals supposedly collecting for charity. Based on social-media patterns, these thieves “create” a charity the potential victim might find appealing. Once personal information is given, account hacking and theft usually occur.

Refund Theft

Theft of economic impact payments is accomplished by criminals filing false tax returns to divert refunds to the wrong bank accounts or addresses. Taxpayers should visit IRS.gov to ensure their correct address is on file. Be sure to do this annually.

Senior Fraud

Phishing scams linked to the novel coronavirus are designed to steal personal information, and seniors are frequently targeted. Scammers mention names of relatives or acquaintances, claiming they donated money and mentioned the potential victim as someone who may want to donate, too. Nobody should donate money unless they’re 100% sure that the organization is legitimate.

 

Scams Against Immigrants

Scams against non-fluent English speakers are typically threatening in nature. These con artists usually have some of the taxpayer’s information, which makes the call seem legitimate: they claim they are IRS agents and threaten deportation or even jail time unless immediate payments are made.

Payment and Repayment Scams

Criminals sometimes place bogus refunds in a taxpayer’s authentic bank account. A quick follow-up call is then made by the scammer posing as an IRS employee. He or she claims errors were made and the money must be returned immediately to avoid fines and interest. Taxpayers are usually told to purchase specific gift cards with which to refund the money. The IRS never demands repayment by a specific method. Taxpayers receiving such requests should contact their bank and the IRS immediately.

Ghost Preparers

As their name implies, such individuals prepare tax returns but don’t sign them. They charge a substantial fee for the preparation, promising huge refunds for which the filers don’t usually qualify. Legally, those who assist in tax return preparation for a fee must have a Preparer Tax Identification Number and must sign the return. If asked to sign a blank return, a filer should immediately suspect fraud and refuse to proceed.

OIC Mills

Tax debt resolution companies sometimes embellish a person’s chances to settle tax debts for a fraction of the amount due through an Offer in Compromise, or OIC. Although an OIC is a legitimate option, shady businesses oversell the program’s benefits to unqualified filers to justify high upfront fees. Those in need of such arrangements should contact an offer-in-compromise attorney instead.

Payroll Scams

These scams are designed to steal W-2 forms and tax information. They’re referred to as Business Email Spoofing. Most are direct-deposit or gift-card scams. With the latter, a request to purchase gift cards comes from a compromised email account and therefore appears legitimate. They may also impersonate the intended victim so the organization reroutes their direct deposit to the fraudster’s account.

Ransomware

Ransomware is simply malware that hijacks a person’s computer. The potential victim’s device is locked or their data encrypted, and a “ransom” is demanded to unlock it or restore access to its data. The thief poses as an IRS agent and says the computer was locked because of a delinquent payment. Filers should know that the IRS does not use such measures for tax collection. Speak to an IRS tax attorney if you think you’ve been targeted by a scam.

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