2020 Tax Scams | Fake Charities | Refund Theft | OH | KY | IN

Don’t Be Fooled! Tax Scams in 2020

Published on by Andy Bertke in Tax Services, Technology

Don’t Be Fooled! Tax Scams in 2020

“We don’t get fooled again!” are the lyrics and namesake of the 1970 song by Rock n’ Roll band The Who, and 50 years later, they are still words to live by in today’s chaotic environment.  With all of the distractions brought on by the pandemic comes a golden opportunity for crooks to take advantage of people who are anxious and have let their guard down to either get assistance from, or help others in a time of need.  These scammers are unfortunately very good at what they do, and they know the time and the opportunity to take advantage is ripe.

Recently, the IRS has listed their “Dirty Dozen” tax scams for 2020, and this article will focus the scams centered around COVID-19 schemes that include, among others, those aimed at tax relief and Economic Impact Payments (EIPs).

Payroll and HR scams

The Information Release warns tax professionals, employers and taxpayers to be on guard against phishing designed to steal Form W-2s and other tax information, particularly now with many businesses closed and their employees working from home due to COVID-19.

These are Business Email Compromise (BEC) or Business Email Spoofing (BES) scams. Currently, two of the most common types of these scams are the gift card scam and the direct deposit scam. Many different kinds of imposters ask you to pay with gift cards. Someone might call you and claim to be from the IRS, collecting back taxes or fines. Or you may receive a phony email requesting a change to their direct deposit information that must happen before the processing of the next payroll.

Phishing scams

Taxpayers should be always alert to potential fake emails or websites looking to steal personal information. It is crucial to remember that the IRS will never initiate contact with taxpayers via email about a tax bill, refund or Economic Impact Payments (EIP). When the IRS needs to contact a taxpayer, the first contact is normally by letter delivered by the U.S. Postal Service.

IRS Criminal Investigation Division has seen a tremendous increase in phishing schemes utilizing emails, letters, texts and links using keywords such as “coronavirus,” “COVID-19” and “Stimulus” in various ways.

Economic Impact Payment (EIP) or refund theft

In addition to stealing tax refunds, this year criminals turned their attention to stealing EIPs. EIPs are one-time payments to taxpayers provided by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Criminals use stolen information to file false tax returns or supply other bogus information to the IRS to divert refunds to wrong addresses or bank accounts.

Social media scams

Taxpayers need to protect themselves against social media scams, which frequently use events like COVID-19 to try to trick people. Social media enables anyone to share information with anyone else on the Internet, and scammers are becoming proficient in being able to use that information for a wide variety of scams.

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 people trying to help in times of need. Fraudulent schemes normally start with unsolicited contact by telephone, text, social media, e-mail or in-person using a variety of tactics. Bogus websites use names like those of 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. Taxpayers should be particularly wary of charities with names that mimic those of nationally known organizations.

In summary, it always pays to be vigilant, and double-check if you feel like something is out of place. As you can see from the various examples above, criminals will attack both companies and individual taxpayers.  Pay extra attention and care to your elderly relatives, as they are more likely to be targeted and victimized by scammers than anyone else in today’s increasingly technologically complicated society.

If you have questions above any of these potential scams, or other inquiries about your tax returns, contact a member of the Barnes Dennig tax team today. We’re here to help!


Related Services

Related Industries

More Insights

Apply Now