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IRS updates “Dirty Dozen” tax schemes for 2020 (Part 1)

We all know taxes can be complicated, which is why they are a huge target for scammers. Here are the first six of 12 “Dirty Dozen” tax scams to look out for in 2020.

  1. Phishing: A scam involving fake emails or websites that aim to steal personal information. To protect yourself from this scam, the IRS warns not to click on links that claim to be from the IRS. Also, the IRS will never initiate contact with taxpayers about a tax bill over email. Be especially wary about scams involving coronavirus tax relief which scammers have been quick to incorporate into their schemes.
  2. Fake Charities: In trying times (such as the COVID-19 pandemic) the number of fake charities significantly increase, attempting to steal money from people who are just trying to help others. These fake charities often initiate unsolicited contact by phone, email, or in person. A legitimate charity would be able to provide their EIN (employer identification number) on request. The IRS also has a search tool to find qualified charities.
  3. Threatening impersonator phone calls: Scammers will attempt to instill fear and urgency by calling a victim threatening arrest, deportation, etc. if a tax bill is not paid immediately. 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: Similar to “catfishing” these scams seek to convince a potential victim that they are actually dealing with someone that they trust over email, text or social media platforms.
  5. Economic impact payment or refund theft: This year scammers had new potential targets- the COVID economic impact payments. By filing false tax returns or other forms, the goal with these scams is to divert refunds or payments to wrong addresses or bank accounts. The IRS also warned nursing homes and other care facilities that economic impact payments generally belong to the recipients, not the organizations.
  6. Senior fraud: Senior Americans are more likely to be targeted by scams than any other segment of society. Senior citizens and those looking after them should be on alert for tax scams targeting them.

To be continued…

Don’t miss: The Taxpayer Advocate Service: A voice for the taxpayer

Please always be cautious and careful when dealing with sensitive information. And, when in doubt, feel free to contact your Henry+Horne tax preparer with any questions.

Haley Braun, CPA