The beginning of each year brings with it new opportunities and challenges. Not long after most of us have all but abandoned our new year’s resolutions do we start receiving pestering emails and mail-in notifications reminding us to file our taxes by the April 15th deadline. If you’re one of the lucky people who tends to get a refund, you may likely be ecstatic about these reminders; for many others, this is an unpleasant time of forking over money to the IRS. Because this is a stressful time regardless of your outcome from filing, it is known that many people have fears because of all of the unknown factors and things they don’t understand. Tax professionals try to help ease these concerns, but malicious actors who are equally aware of these struggles use this time as an opportunity to try and steal personal information and money from unsuspecting victims.
The Usual Suspects
The norm for these scams are people looking to steal personally identifiable information such as Social Security numbers, addresses, and other information that could be used to steal a person’s identity and if that wasn’t enough, many scammers work to steal money. These scams have been around for decades — even before the Internet, people would get false phone calls of people pretending to be the IRS in attempts to dupe them. With the Internet, malicious actors turned to phishing emails which appeared and other technological advancements, these scams get more and more sophisticated as we all become more aware of them. Aggressive calls and phishing scams are among the IRS’s dirty dozen tax scams among others such as social media scams, fake charities, and scams targeting older US citizens or non-English speaking tax payers. Filing our 2020 taxes presents a new challenge with a major scam, particularly for those of us who use trusted tax professionals to assist us in our taxes.
Tax season is a time of year that can cause a lot of stress for tax payers. For many, doing their own taxes is not something that could realistically be accomplished without the help of a tax professional — and that is what the pros are for! Because we are still living in a COVID world with restrictions in many states accompanied by some people still not feeling totally comfortable going out and about as they once would, tax professionals are encouraging online as well as in-person options to accommodate each tax payer’s preferences. This is an advantage to many of us, but of course, scammers are fully aware of this and have started to prey on unsuspecting victims through ghost preparers.
In early February, the IRS warned about a slew of tax preparers falsifying information on tax returns with the promise of getting the tax payer a higher return by providing incorrect income information as well ass and adding deductions for which the tax payer would not legitimately qualify. The ghost portion of this scam’s title comes into play because these preparers who are providing all of this completely false information then refuse to sign in order to claim responsibility for their work so that the lies would not be tied back to them.
The norm is that a tax professional who prepares your taxes signs the forms and provides a tax ID as well. If a person refuses to sign, the IRS warns that they likely provided false information that may include incorrect bank information or addresses for receipt of deposit of a refund. If a preparer refuses to sign your tax documentation or provide their tax ID, notify the IRS and do not submit that documentation as your legitimate tax return. It is always safest to seek out tax professionals via your own research rather than clicking a link in your email from an unknown or suspicious sender.
Some of these scammers also went as far as stealing legitimate EFINs Electronic Filing Identification Numbers from honest tax preparers. The malicious actors are stealing client data and tax preparers’ identities in order to file falsified tax documents to receive refunds and they are doing this via sophisticated phishing scams targeted at the tax pros — the IRS encourages them to be even more vigilant that tax season than ever before.
The IRS never contacts tax payers directly via any means besides the United States Postal Service. If you receive a text, call, or email that claims to be from the IRS, this is not a legitimate action by the government. To stay up-to-date on scams that the IRS is aware of, you can follow them on social media.