Be Aware of Tax Season Scams
The peak of tax season is an important reminder to be aware that there may be scams lurking among your client's wage forms, emails and notifications.
Smishing – Texting Scams
The IRS has identified and reported thousands of fraudulent domains tied to multiple text scams (known as smishing) targeting taxpayers.
Let your clients know to be wary of anyone or any message claiming to be from the IRS; scammers often pose as IRS agents to try and exploit unsuspecting tax filers. Here’s an example of the IRS text scam sent to the Identity Theft Resource Center:
If your clients receive a text that appears to be from the IRS, remind them to NOT respond to the message, open any attachments or click on any links - these could contain malicious codes that can harm their device.
Report these texts to the IRS to help security professionals identify and stop the fraudsters. The report should include both the body of the message and the sender's information in one email or text. If necessary, take a screenshot as evidence and forward these messages via text to 7726 (SPAM) or to the IRS inbox at email@example.com.
When in doubt, advise your clients to always reach out directly to your office to verify its validity and never provide your personal information unless it is with a trusted organization.
Form W-2 Scam
There is a new W-2 scheme circulating on social media, it instructs people to use tax software to manually fill out a Form W-2 and enter false income information and withholding figures, often in the thousands or even tens of thousands. Promises of a substantial refund – sometimes as much as five figures – lures people into filing these bogus returns electronically in an attempt to steal from the IRS.
There are variations where taxpayers use Form 7202, Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals, or Schedule H (Form 1040), Household Employment Taxes to claim false credits.
The IRS warns taxpayers against filing these returns to avoid severe penalties. Filing a false tax return can be subject to a $5,000 penalty, and criminal prosecution is possible in extreme cases. Any taxpayer who purposefully gives false information on their taxes is at risk for committing a federal crime and could face jail time for the offense. Those considering or have filed a frivolous return should consult with an experienced tax preparer immediately so they can limit their potential damage and legal liability.