February 23, 2024
Message from the IRS:
Thousands of people have lost millions of dollars and their personal information to tax scams. Scammers use the regular mail, telephone and email to set up individuals, businesses, payroll and tax professionals. The IRS has posted this information on their website to help protect people from becoming victims.
The IRS will not email or text you.
The IRS doesn't initiate contact with taxpayers by email, text messages or social media channels to request personal or financial information. The IRS initiates most contacts through regular mail delivered by the United States Postal Service. However, there are circumstances in which the IRS will call or come to a home or business. These include when a taxpayer has an overdue tax bill, a delinquent (unfiled) tax return or has not made an employment tax deposit.
Scams targeting taxpayers
Scam Mailing
The IRS warns taxpayers to be on the lookout for a new scam mailing that tries to mislead people into believing they are owed a refund. The new scheme involves a mailing coming in a cardboard envelope from a delivery service. The enclosed letter includes the IRS masthead with contact information and a phone number that do not belong to the IRS and wording that the notice is "in relation to your unclaimed refund.”
Employee Retention Credit Scams
The IRS reminds businesses and tax-exempt groups to watch out for telltale signs of misleading claims about the Employee Retention Credit (ERC), sometimes called the Employee Retention Tax Credit or ERTC. The IRS and tax professionals continue to see aggressive broadcast advertising, direct mail solicitations and online promotions involving the ERC. While the credit is real, aggressive promoters are misrepresenting and exaggerating who can qualify for the credit. The IRS has issued many warnings about ERC schemes from third party promoters that charge large upfront fees or a fee based on the amount of the refund.
Filing Season Scams involving Fake W-2 Forms
The IRS warns taxpayers of new scams that urge people to use wage information on a tax return to claim false credits in hopes of getting a big refund.
Pandemic Related Scams
In a continuing twist on a common scam, the IRS, state tax agencies and tax industry warn tax professionals to beware of evolving phishing scams that use various pandemic-related themes to steal client data.
Charity Fraud Awareness
The Internal Revenue Service warns taxpayers to be wary of criminals soliciting donations and falsely posing as legitimate charities. When fake charities scam unsuspecting donors, the proceeds don’t go to those who need the help and those contributing to these fake charities can’t deduct their donations on their tax return.
"Pennies-on-the-Dollar"
The IRS reminds taxpayers to beware of promoters claiming their services are needed to settle with the IRS, that their debts can be settled for “pennies-on-the-dollar” or that there is a limited window of time to resolve tax debts through the Offer in Compromise (OIC) program. These promoters are often referred to as “OIC Mills.” Find information on OIC Mills in the news release IRS “Dirty Dozen” list warns people to watch out for Offer in Compromise ‘mills’ where promoters claim their services are needed to settle IRS debts.
Scams Targeting Education Institutions
The Internal Revenue Service warned of an ongoing IRS-impersonation scam that appears to primarily target educational institutions, including students and staff who have ".edu" email addresses.
Identify Theft and Unemployment Benefits
The IRS urges taxpayers to be on the lookout for criminals seeking to steal their identities to file fraudulent claims for unemployment compensation. Because unemployment benefits are taxable income, states issue Forms 1099-G, Certain Government Payments, to recipients and to the IRS to report the amount of taxable compensation received and any withholding. Box 1 on the form shows "Unemployment Compensation." Taxpayers who received a Form 1099-G for 2020 unemployment compensation that they did not receive should take the steps outlined at Identity Theft and Unemployment Benefits.
"Ghost" Tax Return Preparer
The IRS warns taxpayers to avoid unethical tax return preparers, known as ghost preparers. A ghost preparer is someone who doesn't sign tax returns they prepare. Not signing a return is a red flag that the paid preparer may be looking to make a quick profit by promising a big refund or charging fees based on the size of the refund.
IRS Impersonation Telephone Scams
A sophisticated phone scam targeting taxpayers, including recent immigrants, has been making the rounds throughout the country. Callers make aggressive calls posing as IRS agents, using fake names and bogus IRS identification badge numbers in hopes of stealing taxpayer money or personal information. They may know a lot about their targets, and they usually alter the caller ID to make it look like the IRS is calling. Victims are told they owe money to the IRS and it must be paid promptly through a gift card or wire transfer. Victims may be threatened with arrest, deportation or suspension of a business or driver’s license. In many cases, the caller becomes hostile and insulting. Victims may be told they have a refund due to try to trick them into sharing private information. If the phone isn't answered, the scammers often leave an “urgent” callback request.
Click here for more resources and information from the IRS regarding tax season scams.