Another day, another scam to be on the lookout for. The IRS recently issued warning notice IR-2023-131 that addresses what to do if any tax-related correspondence is received promising tax refunds or to “fix” tax problems, to be extremely wary and don’t open them. The IRS will never initiate contact with taxpayers by email, text or social media regarding a bill or tax refund. While numerous tax-related scams already exist, the ones highlighted below are indicated to be on the rise in recent reports. Although it would be virtually impossible to spot each scheme these “artists” try to paint, it’s imperative that taxpayers remain vigilant by not responding and reporting these bad actors to the IRS to help combat the ongoing fraud crisis that is wreaking havoc on our entire nation. Below are some of the different variations of tax scams currently being reported:
The misleading “You may be eligible for the ERC” claim
The Employee Retention Credit (ERC) is a refundable tax credit made only available to eligible employers impacted by the Covid-19 pandemic. With that said, these scammers are diligently working to try to otherwise convince individual taxpayers that do not qualify for an ERC, that they may be “eligible for an ERC” promotion. This scam is so widespread on how it’s been “advertised,” as it’s not just limited to one method of communication. They are flooding email inboxes, sending out letters in the mail, posting on social media, broadcasting on the radio, as well as making unsolicited phone calls to taxpayers in hopes they gain sensitive information one way or another. They are trained to instill a sense of urgency as one of the many tactics they use to inflict immediate attention and cause a reaction out of impulse rather than normal rationale.
Here are a few “red flag” examples of what to look out for:
- The promoter (scammer) says you qualify for the credit before knowing anything about your tax situation.
- You are charged a large upfront fee to have the promoter see if you’re eligible.
- You are charged a fee based on a percentage of the ERC amount.
- The scammer says you “have nothing to lose” by submitting the claim.
- You receive a call, email, or other communication from a questionable source you don’t know.
The ‘claim your tax refund online’ scheme
Another variation riddled with errors and telltale warning signs reportedly come highlighted with a blue headline proclaiming taxpayers should “claim your tax refund online.” An example provided by the IRS below:
“We cheked an error in the calculation of your tax from the last payment, amounting to $ 927,22. In order for us to return the excess payment, you need to create a E-Refund after which the funds will be credited to your specified bank. Please click below to claim your tax refund. If we are unable to complete within 3 days, all pending will be cancelled.”
Emails suggesting ‘third round economic impact payments’ status available
While many states are sending so-called ‘stimulus payments’ in 2023, the Federal government isn’t (the last of those payments were issued in 2021). The IRS has already issued all economic impact payments. These scammers remain persistent in their attempt to lure taxpayers by claiming to have information about the payments and claiming that a “third round economic impact payment” is waiting to be claimed, all they need to do is click the link to complete their “application.” Upon clicking the link to start the “application,” the taxpayer is unknowingly directed to a phishing website where valuable personal information is well underway to being compromised. It can be enticing without a doubt as one may think that they are due this refund, but ultimately that is not the case. It is recommended that if correspondence is received regarding any economic impact payments, to login to your IRS online account to view and verify the payment amounts issued during the pandemic. Within the thousands of reports from taxpayers from just this month that received the suspicious emails, the emails reported are full of errors. An example provided by the IRS below:
“Dear Tax Payer, We hope this message finds you well. We are writing to inform you abount an important matter regarding your recent tax return filing. Our record indicate that we have received your tax return for the fiscal inconsistencies or missing information that require your attention and clarification. You will receive a tax refund of $976.00 , We will process this amount once you have submitted the document we need for the steps to claim your tax refund. Sender : INTERNAL REVENUE SERVICE”
The text scheme offering help to address a problem
This involves an anonymous sender that offered to resolve a tax-related problem by the recipient clicking on the link shown in the text message. It is being reported that many are received with a name, that tries to show legitimacy such as “govirsaccnnt2023,” stating there is a problem with the recipient’s tax return; however, if the recipient clicks the link provided in the message, the sender can fix the problem for them. An example provided by the IRS below:
“MSG … IRS: You federal return was ban-by the IRS. Don’t worry, we’ll help you fix it. Click this link.”
The ‘delivery service’ scam at your door
Previously reported earlier this month was the fraudulent IRS refund mail scam, where scammers sent taxpayers fake physical mailings in a cardboard envelope containing the IRS masthead and wording: “in relation to your unclaimed refund.” These fake letters contain false contact details and ask for personal and financial information, such as a detailed photo of your driver’s license which they can in turn use this sensitive information to commit their number one goal, fraud. Even though these schemes are being executed they aren’t always done flawlessly which helps the scam easier to spot. They often use awkward wording, are grammatically incorrect and include inaccurate information. With that being said, some scams are not as obvious. If after review, you are still uncertain about the legitimacy of the document, rather than respond to the letter, it is recommended you should contact the IRS directly to verify this for you. An example provided by the IRS below:
“You’ll Need to Get This to Get Your Refunds After Filing. These Must Be Given to a Filing Agent Who Will Help You Submit Your Unclaimed Property Claim. Once You Send All The Information Please Try to Be Checking Your Email for Response From The Agents Thanks.”
Where to report “phishy” correspondence received? Or worse, what to do if the link was clicked?
All suspicious tax-related emails should immediately be reported to the IRS. You can forward these emails to email@example.com. If you have experienced a financial loss due to your information being compromised as a result of an IRS scam, you can take the following steps:
- Report the loss to the U.S. Treasury Inspector General for Tax Administration (TIGTA).
- File a complaint with the Federal Trade Commission (FTC).
- Go to www.identitytheft.gov to report identity theft and obtain a recovery plan.
- Additional resource information regarding identity theft can be found on the IRS website at www.irs.gov/identity-theft-central.