Taxpayers must be vigilant against an array of sophisticated scams as tax season unfolds. This crucial information, sourced from the IRS website, highlights the need for awareness and caution. Here, we delve into the most prevalent scams targeting individual taxpayers and tax professionals.
New Scam Mailing Related to Unclaimed Refunds
Scammers are dispatching mailings that masquerade as official IRS communications. These fraudulent letters falsely claim that recipients are due refunds. The danger lies in the convincing nature of these mailings, which often replicate IRS letterheads and language to deceive taxpayers.
Employee Retention Credit Scams
Amidst economic challenges, the Employee Retention Credit has relieved many businesses. However, it’s also become a hotbed for scams. Fraudsters promote misleading information about eligibility and benefits, ensnaring businesses in fraudulent claims.
Fake Form W-2 Wages
Another disturbing trend is encouraging false tax refund claims based on incorrect wage information. Scammers coach taxpayers to file returns with inflated or fabricated wage details, promising substantial refunds.
Pandemic-Related Email Scams
Cybercriminals are still sending phishing emails themed around the pandemic and taking advantage of the global health crisis. These emails aim to steal sensitive client data under the guise of offering pandemic-related information or assistance.
Charity Fraud Awareness
Scammers often exploit the goodwill of taxpayers by posing as legitimate charities. These fraudulent entities solicit donations, depriving genuine charities of much-needed funds.
OIC Mills
In these scams, promoters falsely claim they can settle tax debts for a fraction of the owed amount, often promising “pennies-on-the-dollar” settlements. Such offers are usually misleading and can result in more financial trouble for taxpayers.
Scams Targeting Educational Institutions
IRS-impersonation scams are specifically targeting students and staff with “.edu” email addresses. These scams range from fake tax bills to refund opportunities, aiming to extract personal information or money.
Identity Theft and Unemployment Benefits
A particularly insidious form involves criminals filing fraudulent unemployment compensation claims using stolen identities. This impacts government resources and the individuals whose identities are stolen.
Natural Disaster-Related Scams
Following major disasters, scammers often pose as charitable organizations, exploiting the generosity of taxpayers wishing to help disaster victims.
“Ghost” Tax Return Preparers
Unethical tax preparers may complete returns but not sign them, known as “ghost” preparers. They often promise big refunds and charge hefty fees, leaving taxpayers in legal jeopardy.
IRS Impersonation Telephone Scams
Here, callers pose as IRS agents and demand money or personal information. These scams can be particularly convincing and threatening, causing undue stress and financial loss.
Scams Targeting Tax Professionals
Tax professionals are not immune. Identity thieves target them to gather personal data for fraudulent tax returns. They also face various phishing and malware schemes designed to steal sensitive client information.
Fraudsters Posing as Taxpayer Advocacy Panel (TAP)
In this scheme, phishing emails falsely appear to be from TAP, seeking personal and financial information. These emails can be compelling and pose a significant risk of identity theft.
The IRS continuously updates and educates the public about these scams. Visiting the IRS website is highly recommended for more detailed information and updates on these and other tax-related scams. As always, vigilance and skepticism are critical defenses against these fraudulent activities. Remember, the IRS will never initiate contact with taxpayers by email, text messages, or social media channels to request personal or financial information. Stay informed, stay cautious, and protect yourself from these ever-evolving scams.
Recap of Key Points:
- Widespread Tax Scams: Overview of various tax scams including fake IRS communications, fraudulent tax credit claims, and email phishing.
- Targeted Fraud: Specific scams targeting students, tax professionals, and the general public, using sophisticated impersonation tactics.
- Preventive Measures: Importance of staying vigilant, verifying information, and understanding how to identify and avoid these scams.
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