30 July 2020

The “Dirty Dozen”

Last week we talked about a specific scam that had affected a client. Based on the response, I thought we should look at the Top 12 Tax Scams on the IRS’ radar.

Below is an abbreviated version of the List. CLICK HERE for the complete article.

This year, the Dirty Dozen focuses on scams that target taxpayers. The criminals behind these bogus schemes view everyone as potentially easy prey. The IRS urges everyone to be on guard all the time and look out for others in their lives.

Phishing: Taxpayers should be alert to potential fake emails or websites looking to steal personal information. The IRS will never initiate contact with taxpayers via email.
Fake Charities: Criminals frequently exploit natural disasters and other situations such as the current COVID-19 pandemic by setting up fake charities to steal from well-intentioned people trying to help in times of need. Taxpayers can find legitimate and qualified charities with the search tool on IRS.gov.
Offer in Compromise Mills: Taxpayers need to wary of misleading tax debt resolution companies that can exaggerate chances to settle tax debts for “pennies on the dollar” through an Offer in Compromise (OIC). Taxpayers can apply for an OIC without third-party representation; but the IRS reminds taxpayers that if they need help, they should be cautious about whom they hire.
Threatening Impersonator Phone Calls: A common one remains bogus threatening phone calls from a criminal claiming to be with the IRS. The IRS will never threaten a taxpayer or surprise him or her with a demand for immediate payment.
Unscrupulous Return Preparers: Most tax professionals provide honest, high-quality service, but dishonest preparers pop up every filing season committing fraud, harming innocent taxpayers or talking taxpayers into doing illegal things they regret later.
Social Media Scams: Taxpayers need to protect themselves against social media scams, which frequently use events like COVID-19 to try tricking people. Social media scams have also led to tax-related identity theft.
Senior Fraud: Senior citizens and those who care about them need to be on alert for tax scams targeting older Americans. Older Americans are becoming more comfortable with evolving technologies, such as social media. Unfortunately, that gives scammers another means of taking advantage.
Scams targeting non-English speakers: IRS impersonators and other scammers also target groups with limited English proficiency. A common one remains the IRS impersonation scam 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.
Fake Payments with Repayment Demands: Criminals are always finding new ways to trick taxpayers into believing their scam including putting a bogus refund into the taxpayer’s actual bank account. Then the fraudster will demand repayment in a specific form, like gift cards. The IRS will never demand payment by a specific method.
Payroll and HR Scams: Tax professionals, employers and taxpayers need to be on guard against phishing designed to steal Form W-2s and other tax information. This is particularly true with many businesses closed and their employees working from home due to COVID-19.
Ransomware: This is a growing cybercrime. Ransomware is malware targeting human and technical weaknesses to infect a potential victim’s computer, network or server. Once infected, ransomware looks for and locks critical or sensitive data with its own encryption.
EIP or Refund Theft: The IRS has made great strides against refund fraud and theft in recent years, but they remain an ongoing threat. Criminals this year also turned their attention to stealing Economic Impact Payments as provided by the Coronavirus Aid, Relief, and Economic Security (CARES) Act.