Here are this year’s “Dirty Dozen” scams:
2. 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. It starts with unsolicited contact by telephone, text, social media, e-mail or in-person using a variety of tactics. Bogus websites use names similar to legitimate charities to trick people to send money or provide personal financial information. They may even claim to be working for or on behalf of the IRS to help victims file casualty loss claims and get tax refunds.
3. Threatening Phone Calls: Scam phone calls, including those threatening arrest, deportation or license revocation if the victim doesn’t pay a bogus tax bill, are reported year-round. These calls often take the form of a “robocall,” a text-to-speech recorded message with instructions for returning the call. The IRS will never demand immediate payment, threaten, ask for financial information over the phone, or call about an unexpected refund or Economic Impact Payment.
4. Social Media Scams: These frequently use events like COVID-19 to try and trick people. Social media enables anyone to share information with anyone else on the Internet. These include emails where scammers impersonate someone’s family, friends or co-workers. Social media scams have also led to tax-related identity theft by convincing a potential victim that he or she is dealing with a person close to them that they trust via email, text or social media messaging. A scammer may email a potential victim and include a link which contains malware intended to commit more crimes. Scammers also infiltrate their victim’s emails and cell phones to go after their friends and family with fake emails that appear to be real and text messages soliciting, for example, small donations to fake charities that are appealing to the victims.
5. Economic Impact Payments or Refund Theft: Besides refund fraud and theft in recent years, criminals have turned their attention to stealing Economic Impact Payments as provided by the CARES Act. Criminals file false tax returns or supply bogus information to the IRS to divert refunds to wrong addresses or bank accounts. The IRS recently warned nursing homes and other care facilities that Economic Impact Payments generally belong to the recipients, not the organizations providing the care.
6. Senior Fraud: Seniors are more likely to be targeted and victimized by scammers than other segments of society. Financial abuse of seniors is a problem among personal and professional relationships. Anecdotal evidence across professional services indicates that elder fraud goes down substantially when the service provider knows a trusted friend or family member is taking an interest in the senior’s affairs. Older Americans are becoming more comfortable with evolving technologies, such as social media. Unfortunately, that gives scammers another means of taking advantage through scams linked to Covid-19.
7. Robocalls: A text-to-speech recorded message with instructions for returning the call made by a real person. These con artists may have some of the taxpayer’s information, including their address, the last four digits of their Social Security number or other personal details – making the phone calls seem more legitimate. 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. Taxpayers who are recent immigrants often are the most vulnerable and should ignore these threats and not engage the scammers.
8. Ghost Preparers: Ghost preparers don’t sign the tax returns they prepare. They may print the tax return and tell the taxpayer to sign and mail it to the IRS. For e-filed returns, the ghost preparer will prepare but not digitally sign as the paid preparer. Unscrupulous preparers may also target those without a filing requirement and may or may not be due a refund. They promise inflated refunds by claiming fake tax credits, including education credits, the Earned Income Tax Credit (EITC) and others. Taxpayers should avoid preparers who ask them to sign a blank return, promise a big refund before looking at the taxpayer’s records or charge fees based on a percentage of the refund.
9. 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. These offers are available for taxpayers who meet very specific criteria under law to qualify for reducing their tax bill. But unscrupulous companies oversell the program to unqualified candidates so they can collect a hefty fee from taxpayers already struggling with debt.
10. Fake Payments with Repayment Demands: These criminals trick taxpayers into believing their scam by actually putting a bogus refund into the taxpayer’s actual bank account. A con artist steals or obtains a taxpayer’s personal data including Social Security number and bank account information. The scammer files a bogus tax return and has the refund deposited into the taxpayer’s account. Then the fraudster places a call to them, posing as an IRS employee. The taxpayer is told that there’s been an error and that the IRS needs the money returned immediately or penalties and interest will result. The taxpayer is told to buy specific gift cards for the amount of the refund.
11. Payroll and HR Scams: Employers and taxpayers need to be on guard against scams designed to steal Form W-2s and other tax information. Especially businesses that have closed and their employees are working from home due to COVID-19. In the gift card scam, a compromised email account is often used to send a request to purchase gift cards in various denominations. In the direct deposit scheme, they impersonate the potential victim to have the organization change the employee’s direct deposit information to reroute their deposit to an account the fraudster controls. Scammers have used a variety of ploys to include requests for wire transfers, and payment of fake invoices.
12. Ransomware: Ransomware is malware targeting human and technical weaknesses to infect a potential victim’s computer, network or server. Malware is a form of invasive software that is often frequently inadvertently downloaded by the user, usually through email to trick a potential victim into opening a link or attachment containing the ransomware. Once downloaded, it tracks keystrokes and looks for and locks critical or sensitive data with its own encryption. Victims generally aren’t aware of the attack until they try to access their data, or they receive a ransom request in the form of a pop-up window. These criminals frequently use anonymous messaging platforms and demand payment in virtual currency such as Bitcoin.
Reach Out To Us: We urge clients to be vigilant to these 12 threats during the pandemic and its aftermath. Please contact your Fuoco Group advisor with questions at CPA@Fuoco.com if you are suspicious of IRS emails or feel targeted in any way by scammers – DO NOT engage with them online or the phone. Report fraud and scams at phishing@irs.gov.
Note that the IRS does not:
• Generally, the IRS will first mail a bill to any taxpayer who owes taxes.
• Demand that you pay taxes without the opportunity to question or appeal the amount they say you owe.
• Threaten to bring in local police, immigration officers or other law-enforcement to have you arrested for not paying.
• The IRS also cannot revoke your driver’s license, business licenses, or immigration status. Threats like these are common tactics scam artists use to trick victims into buying into their schemes.
