It is important to remain vigilant and watch for possible COVID-19 tax scams as you file your U.S. returns in 2021. Some criminals will file a bogus return on your behalf and claim the tax refund. You might only find out later when you receive a notification of unpaid taxes.
Here are some of the scams to watch out for:
COVID-19 Tax Scams: Phishing
You may receive emails or communication that appears to be from the IRS. Such an email could portray urgency to take action immediately. It might do this by making you believe that there is something wrong with your tax return or that you could receive an early stimulus check if you act immediately. The scam is a popular one but leaves great harm in its wake.
Another common scam involves an email that appears to be from a popular tax software. The message warns that your account has been locked and provides a link to unlock your account. However, once you click on the link, the scammers will require your personal information to proceed. They will then use that information to gain access to other sensitive accounts you own.
Another common tax scam requires you to update your information on your tax return. The email they send you contains a link to a spoof website – often very convincingly realistic — where the scammers collect your personal information. In some cases, the scammer will send a form in place of a link and attach instructions to send the document with your personal financial information.
You might also receive an email claiming that your tax payment has been deducted from your account. The first reaction in most cases will be shock. The next common reaction is to click on the attachment the scammers send you.
Once you open the attachment, the scammers will gain access to your device and sensitive information.
Scammers could also call you claiming to be from the IRS. They will demand an immediate tax payment through a gift card or wire transfer.
Taxpayers are also likely to encounter scams where a scammer offers tax preparation services. Scammers will take your money and fail to file your returns, or file the returns and collect the refunds for themselves.
Protecting Yourself from COVID-19 Tax Scams
Here are some tips to keep in mind during tax season so you do not fall for scam tactics.
- The IRS will never contact you via phone or email; they send communications by mail
- Watch out for emails that address you as “sir,” “taxpayer,” or “madam”
- Be cautious of emails containing typos
- Do not open attachments or links on emails claiming to be from the IRS. If you have any queries or concerns about any tax issues, visit the IRS website directly.
- The IRS does not demand tax return payments through gift cards or wire transfers
- The IRS does not send messages or call threatening the suspension or cancellation of your social security number. (Your SSN cannot be canceled)
- Never respond to unsolicited mail requesting your personal documents
- File your tax returns early so that you do not fall for last-minute tax scams that seek to steal your information in the name of preparing a tax return for you
- Check your credit reports at least annually to help you catch signs of identity theft
Amidst the confusion and changes brought on by the pandemic, it is not hard to fall for a social engineering attack, including a tax scam. However, instead of beating yourself up for falling for such scams, you can take back control by reporting the fraud to the IRS (email@example.com)and law enforcement. Additionally, RKN Global notes that you can notify the three major credit bureaus to increase your protection.