August 4, 2023
Fraud in any form is certainly unwelcome. Over the past few years there has been a significant increase in the amount of cyber attacks being perpetrated. In fact, there were over 232,972 individuals that fell victim to phishing attacks of various types in 2021. More specific to tax fraud, there has been a concurrent increase resulting in an average median loss was $278, 325. Given these numbers, the IRS has been working closely with state tax authorities, software companies, tax preparation firms, and payroll processors to defend against identity theft and fraud. A key purpose of the group, known as the Security Summit, is to reduce the amount of fraud through ongoing reporting and education.
In late July, as part of the summer news release series, the IRS issued a warning about the more prevalent scams targeting taxpayers. The list includes warnings involving the Employee Retention Tax Credit (ERTC), economic impact payments, and the help you fix it scam. Since these continue to become more sophisticated, it is often difficult to determine authenticity. It appears most are being perpetrated using misleading email or texts. To help clients, prospects, and others, Wilson Lewis has provided a summary of the key details below.
In the scam, fraudsters falsely claim the third round of Economic Impact Payments are available and offer assistance making a claim. While playing off real world events, bad actors attempt to look legitimate in the request. Unfortunately, the third round of Economic Impact Payments was distributed in 2021 and there have been no additional payments authorized.
The IRS warns taxpayers not to be fooled by these messages. Scam emails often arrive with spelling or grammatical errors and contain several inaccuracies. It asks people to click on a click to complete an “application”. What most don’t realize is when clicked it takes them to a website (which may look legitimate) but is designed to harvest personal information (social security number, date of birth, etc.).
This text scam is designed to trick taxpayers into believing there is an issue with the most recent tax return. These messages usually contain a vague statement about the purported issue but provide assurance they can help. The text appears to originate from an authentic sender, including “govirs-accnnt2023”, and asks the recipient to click on a link.
The IRS warns taxpayers not to be fooled and to look out for common red flags including spelling mistakes and improper grammar. To make the point, the agency shared one such message. “MSG … IRS: You federal return was ban-by the IRS. Don’t worry, we’ll help you fix it. Click this link. “Like the prior scam, it opens a site specifically designed to harvest personal information.
This scam targets businesses and makes false claims about the opportunity to claim this pandemic era tax credit. There has been a significant increase in attempts to lure taxpayers into improperly claiming the credit. Promoters rely on a high volume of online “offers”, social media ads, radio spots and unsolicited calls. Some have reported receiving direct mail which appears to look authentic but is from a fictitious federal agency. Usually there is an urgent tone requesting immediate action be taken.
Bad actors make false claims about the credit and fail to disclose important information about eligibility, limitations, and income tax implications of an incorrect submission. Warnings signs include the ability to quickly determine eligibility without any details and those who charge up front fees. It is important to note, any business that improperly claims the ERTC is not only required to pay it back but may also be subject to additional penalties and interest.
Contact Us
The IRS never initiates contact with taxpayers by email, text or social media regarding a bill or tax refund. It is important not to click on any communication claiming to be from the IRS as it can load malicious software. If you have questions about the information outlined above or need assistance with a tax or accounting issue, Wilson Lewis can help. For additional information call 770-476-1104 or click here to contact us. We look forward to speaking with you soon.