IRS warns of coronavirus-related tax scams

Advice

The Internal Revenue Service issued a warning Thursday urging taxpayers to beware of scammers calling and emailing them about the stimulus payments they are expecting as a result of last week’s CARES Act, along with other schemes related to the novel coronavirus pandemic, as they could lead to identity theft and tax fraud.

Taxpayers and tax practitioners should be careful about falling for not only phishing emails, but also text messages, websites and social media attempts that request money or personal information.

“We urge people to take extra care during this period,” said IRS Commissioner Chuck Rettig in a statement Thursday. “The IRS isn’t going to call you asking to verify or provide your financial information so you can get an economic impact payment or your refund faster. That also applies to surprise emails that appear to be coming from the IRS. Remember, don’t open them or click on attachments or links. Go to IRS.gov for the most up-to-date information.”

The IRS and its Criminal Investigation Division have noticed a slew of new phishing schemes directed against unsuspecting taxpayers who are already dealing with the fallout from the COVID-19 pandemic. In some instances, scammers are trying to convince taxpayers to sign over their checks to them. Scammers may use the crisis as an opportunity to entice taxpayers into “verifying” their filing information in order to receive their stimulus payments, and then use their personal information to file false tax returns in an identity theft scheme.

“History has shown that criminals take every opportunity to perpetrate a fraud on unsuspecting victims, especially when a group of people is vulnerable or in a state of need,” said IRS Criminal Investigation chief Don Fort in a statement. “While you are waiting to hear about your economic impact payment, criminals are working hard to trick you into getting their hands on it. The IRS Criminal Investigation Division is working hard to find these scammers and shut them down, but in the meantime, we ask people to remain vigilant.”

In most cases, the IRS plans to deposit the stimulus payments, now known as “economic impact payments,” into the direct deposit account that taxpayers have previously provided on their 2018 and 2019 tax returns. Taxpayers who have previously filed but not given direct deposit information to the IRS will be able to provide their banking information online to a newly designed secure portal on IRS.gov in mid-April. If the IRS doesn’t have a taxpayer’s direct deposit information, a check will be mailed to the address on file, but that’s likely to take much longer than a direct deposit. Taxpayers shouldn’t provide their direct deposit or other banking information for others to input on their behalf into the secure portal.

The IRS said that for retirees who don’t normally have a requirement to file a tax return, no action on their part is needed to receive their $1,200 economic impact payment. That comes after a reversal by the Treasury Department and the IRS, who earlier this week said seniors would need to file a “simple tax return” in order to receive the money, but then reversed course Wednesday evening (see our story).

Seniors should be especially careful during this period, the IRS cautioned. The IRS is reminding retirees — including those who receive Forms SSA-1099 and RRB-1099 — that nobody from the IRS will be reaching out to them by phone, email, mail or in person asking for any kind of information to complete their economic impact payment, also sometimes referred to as rebates or stimulus payments. The IRS is sending the $1,200 payments automatically to retirees, with no action or information needed from them to receive the money.

The IRS said to taxpayers that scammers may:

  • Emphasize the words “Stimulus Check” or “Stimulus Payment.” The official term is economic impact payment.
  • Ask the taxpayer to sign over their economic impact payment check to them.
  • Ask by phone, email, text or social media for verification of personal and/or banking information saying that the information is needed to receive or speed up their economic impact payment.
  • Recommend that they can get a tax refund or economic impact payment faster by working on the taxpayer’s behalf. The scam may be conducted by social media or even in person.
  • Mail the taxpayer a bogus check, perhaps in an odd amount, then tell the taxpayer to call a number or verify information online in order to cash it.

“Unfortunately criminals are taking this unprecedented pandemic as an opportunity to exploit the public,” said IRS special agent in charge Ryan Korner in a statement. “It is critical now more than ever to remain vigilant for scams that are attempting to steal your personal information and your money. All Americans should specifically be on the lookout for scammers trying to directly steal their COVID-19 Economic Impact Payment, as well as fraudsters trying to trick them into providing sensitive information by convincing them it is required to receive their payment from the IRS.”

Taxpayers who are on the receiving end of unsolicited emails, text messages or social media attempts to elicit information that claim to come from either the IRS or an organization closely linked to the IRS, such as the Electronic Federal Tax Payment System (EFTPS), should forward it to phishing@irs.gov.

The IRS warned taxpayers not to engage potential scammers online or on the phone. For more information, visit the Report Phishing and Online Scams page on IRS.gov. Official IRS information about the COVID-19 pandemic and economic impact payments is available on the Coronavirus Tax Relief page on IRS.gov.

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