The IRS has recently released its annual list of the biggest tax scams seen over the last year, and unsurprisingly, this year’s list is filled with scams built around the COVID-19 Pandemic.
IRS Commissioner Chuck Rettig stated, “we continue to see scam artists use the pandemic to steal money and information from honest taxpayers in a time of crisis… we provide this list to alert taxpayers about common scams that fraudsters use against their victims.”
The two most noteworthy tax scams that Taxpayers were faced with in response to the pandemic have been Economic Impact Payment Theft and Unemployment Fraud.
Economic Impact Payment Theft:
Scammers took advantage of the Economic Impact “Stimulus” Payments that were issued in response to the Coronavirus pandemic by stealing recipients’’ identities. They did this by sending text messages/emails or making phone calls inquiring about sensitive information such as bank account information, social security numbers, etc.
Many Taxpayers began to receive unemployment payments after losing their jobs due to the pandemic. Scammers again took advantage by claiming fraudulent unemployment compensation from their state under the names of Taxpayers who had not filed claims.
The IRS encourages Taxpayers to be vigilant about these schemes. If you are contacted by someone inquiring about personal information in an effort to issue a federal payment, remember that the IRS will not initiate contact by telephone, email, or text for sensitive information, and the IRS website is the IRS’ official website for information on payments, refunds, and other tax information. If you receive a Form 1099-G reporting unemployment compensation that you didn’t receive, contact your state agency for a corrected form and make sure that you file a return reporting only income you actually received.