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Targeting taxpayers: Stay ahead of tax scams

Thousands of people have lost millions of dollars and their personal information to tax scams, according to the IRS. Scammers use the regular mail, telephone, or email to set up individuals, businesses, payroll and tax professionals.

The IRS doesn't initiate contact with taxpayers by email, text messages or social media channels to request personal or financial information. Protect yourself, and your clients, by knowing the scams making the rounds.

Tax transcript email scam

The IRS has seen a surge of fraudulent emails impersonating the IRS and using tax transcripts as the bait to entice users to open documents containing malware.

This scam is dangerous to business networks, and is triggered when employees open the malware known as Emotet, which spreads the virus throughout the network. It can take months to remove from the network. US-CERT labeled Emotet “among the most costly and destructive malware affecting state, local, tribal, and territorial (SLTT) governments, and the private and public sectors.”

Emotet tricks people into opening infected documents by posing as specific banks and financial institutions, and in the last few weeks, as the IRS. Pretending to be from “IRS Online,” the scam email carries an attachment labeled “Tax Account Transcript” or something similar, and the subject line uses some variation of the phrase “tax transcript.”

These clues can change with each version of the malware. Forward malicious Emotet emails to phishing@irs.gov.

Other scams

Soliciting Form W-2 information 

This scam solicits Form W-2 information from payroll and human resources professionals. The IRS has established a process allowing businesses and payroll service providers to quickly report data losses related to the W-2 scam.

If notified in time, the IRS can take steps to prevent employees from being victimized by identity thieves filing fraudulent returns in their names. There also is information about how to report receiving the scam email. Report these schemes using the process identified at the IRS: Form W-2/SSN Data Theft

Scams related to natural disasters

In the wake of Hurricane Florence, the IRS reminds taxpayers that criminals and scammers try to take advantage of the generosity of taxpayers who want to help victims of major disasters. See IR-2018-188.

IRS-impersonation telephone scams

One sophisticated phone scam targets taxpayers, including recent immigrants. Callers claim to be IRS employees, using fake names and bogus IRS identification badge numbers. They may know a lot about their targets, and they usually alter the caller ID to make it look like the IRS is calling.

Victims are told they owe money to the IRS and it must be paid promptly through a gift card or wire transfer. Victims may be threatened with arrest, deportation or suspension of a business or driver’s license. Read more at: Consumer Alert: Scammers Change Tactics, Once Again

"Verify" calls scam

The IRS warns of a new twist on the old phone scam as criminals use telephone numbers that mimic IRS Taxpayer Assistance Centers to trick taxpayers into paying non-existent tax bills, even going so far as to direct taxpayers to IRS.gov to "verify" calls. See IR-2018-103.

IRS do's and don'ts

The IRS reminds taxpayers it does not send unsolicited emails to the public, nor would it email a sensitive document such as a tax transcript, which is a summary of a tax return. The IRS urges taxpayers not to open the email or the attachment. If using a personal computer, delete or forward the scam email to phishing@irs.gov. If you see these using an employer’s computer, notify the company’s technology professionals.

Recognize the telltale signs of a scam. See also: How to know it’s really the IRS calling or knocking on your door.

Let's talk tax

Judy Vorndran can be reached at jvorndran@taxops.com or 720.227.0093. Follow Judy on LinkedIn.

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