The Internal Revenue Service’s (IRS) “Dirty Dozen Tax Scams” has just been updated for 2020 and you’ll want to pay attention to some new scams that relate specifically to recent events. Remember--contrary to popular belief, the most successful hacks aren’t a product of state of the art technology – just bad guys preying on the less informed and vulnerable, especially during times of uncertainty. The IRS compiles this list every tax season to remind taxpayers to remain vigilant against illegal tax schemes (many of which peak during filing season). Here’s how you can protect yourself.

2020 Dirty Dozen Tax Scams

1. Phishing- Never click on an email claiming to be from the IRS! The IRS will never initiate contact with you via email regarding a bill or tax refund. These phony emails are nothing more than scams to steal your personal information. Scammers are taking advantage of keywords such as coronavirus, COVID-19 and stimulus to play on fear.
2. Fake charities- Be wary of charities with names similar to nationally known organizations—they could be phony! Take a minute to ensure that you’re donating to a legitimate charity. IRS.gov has a search feature, Exempt Organizations Select Check that allows you to find legitimate, qualified charities to which donations may be tax-deductible. Scammers will often exploit national disasters and pandemics by setting up fake charities to steal your information.
3. Phone scams- Did you receive a threatening phone call from the “IRS” asking you to pay an overdue tax bill through a wire transfer or prepaid debit card? This is a scam! The IRS will never call you without first sending a bill through the mail. They will also never request an immediate payment without allowing you to question it, require that you pay in a certain manner, and of course they would never threaten you with arrest, deportation, etc.
4. Social media scams- Events like COVID-19 allow fraudsters to trick people into sharing information. Bear in mind that because social media enables anyone to share information with anyone else on the Internet, there is a chance that scammers will gain access to that information and use it for a variety of scams. Watch out for messages on Facebook (including those that appear to be coming from a close friend or family member) that include suspicious links…if it seems fishy, it probably is!
5. EIP or refund theft- Scammers have turned their attention to stealing economic impact payments (EIPs) as provided by the CARES Act. Criminals will file false tax returns or supply other false information to the IRS to divert refunds to wrong addresses or bank accounts. Nursing homes are being urged to take special note that EIPs generally belong to the recipients, not the organizations providing the care. This comes after concerns that people and businesses may be taking advantage of those receiving payments.
6. Senior fraud- Branching off of this, it’s no secret that elderly individuals are a prime target for cyber scams. The IRS is warning senior citizens and those who care for them to be on alert for tax scams targeting older Americans. With older people becoming more comfortable using technology especially social media, this gives scammers another means of taking advantage.
7. Scams targeting non English speakers- Scammers will also target groups with limited English proficiency with scams that are often threatening in nature. If you receive a phone call threatening jail time, deportation or revocation of a driver’s license, it is probably a scam.
8. Unscrupulous return preparers- Make sure you take time to select the right return preparer. Dishonest preparers appear every filing season committing fraud and talking people into doing illegal things. Pay special mind to so called “ghost” preparers who digitally file returns and don’t sign the tax returns they prepare. Anyone who is paid to prepare returns must have a Preparer Tax Identification Number (PTIN) that they must include on the returns they prepare.
9. Offer in compromise mills- Taxpayers will also want to be wary of misleading tax debt resolution companies that can settle tax debts for “pennies on the dollar” through an “Offer in Compromise” or OIC. These offer taxpayers the chance to reduce their tax bill if they meet certain, very specific criteria. Unscrupulous companies will oversell the program to unqualified candidates so they can collect a fee from taxpayers who are already in debt. Known as “OIC mills,” these scams cast a wide net for taxpayers, charge pricey fees and churn out applications for a program they are unlikely to be eligible for.
10. Fake payments with repayment demands- Another scam involves a con artist obtaining your personal data including social security number or individual taxpayer identification number (ITIN) and bank account information. The fraudster will then file a bogus tax return, have the refund deposited into the taxpayer’s account and then pose as an IRS agent and demand that the money be returned immediately through gift cards. Keep in mind that the IRS will never demand payment by a specific method.
11. Payroll and HR scams- There are specific phishing schemes designed to steal Form W-2s and other tax information. They are known as Business Email Compromise (BEC) or Business Email Spoofing (BES). They have become more widespread during the pandemic, with many businesses closed and their employees working from home. Be wary of any requests for gift cards, wire transfers and fake invoices.
12. Ransomware- Still be on the lookout for ransomware! Ransomware targets human and technical weaknesses to infect a potential victim’s computer, network or server. Don’t click on suspicious links or email attachments.

Don’t fall victim to the dirty dozen. Remember, you’re especially vulnerable during tax filing season! Does something seem suspicious to you? Contact us.