Top 7 New 2020 Tax Scams

With the pushing out of the official 2020 end date for taxes to July 15th, a lot of scammers are taking this extra time to try and come up with all sorts of ways to steal your money. While you may be familiar with the now infamous robo-callers pretending to be from the IRS and needing ‘confirmation of your information’, there are several new variations of this old grifting game you should be aware, and wary of…

Here are some of the top seven new tax scams currently reported by the IRS, and what you can do about them.

Text Message Phishing Scam

That’s right, phishing isn’t just for email anymore. Scammers are taking advantage of mobile devices. The scam goes like this – you receive a text with the IRS name and logo stating that your tax information may have been compromised. Often there will be a link (to a phony website) and or the scammers may request you text back sensitive information, such as “please confirm your Social Security number” or similar. It’s important to remember that the IRS will never ask you for sensitive information via Text. If you do receive a message like this, the IRS recommends you do NOT reply to the original message, but instead forward it to phishing@irs.gov.

The “Ghost Tax Preparer” Scam

Taxes can be complex. Many times taxpayers rely on a third party or ‘tax preparer’ to navigate the morass of tax filings in the hopes of finding better refunds or lower payments. There are many legitimate preparers out there, but there are also a rising number of unethical ones. It’s important to know that any professional tax preparer (or tax assistant) is required by law to have a valid Preparer Tax Identification Number, or PTIN. This number is extremely important because also by law, the tax preparer is required to sign your return and include their PTIN.

So what exactly is a “ghost preparer”? They are scammers that promise big refunds without actually filing a legitimate tax refund. Often they will charge fees upfront based on a percentage of the “big refund” they promise and require you pay them in cash. Many times they will not provide a receipt. Some will actually print the return and tell the taxpayer to sign and mail it to the IRS (or if e-filing they prepare but refuse to digitally sign it as the paid preparer). The very worst of them will actually re-direct the refunds into their own bank account rather than yours.

If you are intending to use a tax preparer to help you with your taxes, the key is research wisely. The IRS has a Directory of Federal Tax Preparers with Credentials where you can find your preparer’s PTIN and confirm it matches to the individual you are working with. If you feel that you may be dealing with a preparer who is not on the up-and-up, you can report abusive tax preparers directly to the IRS via a Complaint Form 14157. And if you feel your preparer may have altered your information or redirected funding without your consent, you can also file a Form 14157-A which is a Tax Return Preparer Fraud or Misconduct Affidavit.

The Emotet Malware Scam

This malware threat is a new version of an old banking Trojan first reported in 2014, when it was known as Geodo or Mealybug. It’s original version of malware focused on stealing your financial data. Recently there’s been a resurgence in this particularly nasty malware. The newer version is targeting businesses of all sizes. The scam begins with an infected email sent to an employee masquerading itself as coming from “IRS Online” and with an attachment labeled “Tax Account Transcript” or similar. If the employee is unfortunate enough to open the attachment, the malware will spread throughout the business network, replicating and causing a complete collapse of the entire business network. The US Computer Emergency Readiness Team has labeled the Emotet Malware “among the most costly and destructive malware affecting state, local, tribal, and territorial (SLTT) governments, and the private and public sectors.”

And while this particular scam isn’t directed against stealing an individual’s tax information, it can cost businesses thousands (and in some cases millions) of dollars to fix. With such a high price tag on so many already financially fragile small businesses, this new scam carries the weight of potentially putting entire groups of employees out of work.

SSN Tax Scam, Part Deux

This one is a new twist on an old scam. Con artists will leave messages claiming to be agents of the IRS. In this new variation, they threaten to suspend or cancel your Social Security number due to “overdue taxes that have not been paid”. The more sophisticated version of this scam may even have the caller including the last four digits of your SSN number.

If you receive a call like this, hang up. Do not return the call, even if they threaten to “bring in law-enforcement groups” to have you arrested. In the words of the IRS “Make no mistake…it’s a scam”. Report the caller ID and call back number to the IRS at phishing@irs.gov and include “IRS Phone Scam” in the subject line. You can also report the call to the FTC and include ‘IRS Phone Scam’ in the notes. Bottom line if you’re unsure that you may owe anything to the IRS, you should call them directly at 800-829-1040.

Charity Tax Fraud Scam

With so much hardship going on in the world right now, so many of us want to do our part to help. Unfortunately scammers are aware of this and are taking advantage of many a person’s good nature. This scam starts with unsolicited contact by phone, email or even social media to impersonate (or claim to be a charity working on behalf of) the IRS to ‘help victims file casualty loss claims and get tax refunds’. The grift is to get you to either go to a bogus website, or return a call to their bogus organization. Once there they ask you to give over sensitive tax information so your return (or portion of) can be ‘donated’ to those in need.

That’s just not how donations of this sort work. For those altruistic people out there, the best way to give is to first go to the IRS Tax Exempt Organization Search area on the IRS.gov site. As this is a particularly heinous scam, if you suspect you’ve received a scam like this, you’re encouraged to report these thieves via email to phishing@irs.gov with the subject heading ‘Charity Fraud Scam’.

The Tax Return Reminder Scam

This scam targets the many people relying on their tax return money to help with financial needs. It shows up in either email or Text with the phrases “Automatic Income Tax Reminder” or “Electronic Tax Return Reminder”. The emails and/or texts have links that show an IRS.gov-like website with details pretending to be about the taxpayer’s refund, electronic return or tax account. The emails contain a “temporary password” or “one-time password” to “access” the files to submit the refund. But when taxpayers try to access these, it turns out to be a malicious file. By infecting computers with malware, these impostors may gain control of the taxpayer’s computer or secretly download software that tracks every keystroke, eventually giving them passwords to sensitive accounts, such as financial accounts. Be assured, this is just another scam.

IRS Commissioner Chuck Rettig commented on this scam by saying, “The IRS does not send emails about your tax refund or sensitive financial information. This latest scheme is yet another reminder that tax scams are a year-round business for thieves. We urge you to be on-guard at all times.”

If you believe you’ve received one of these scam communications, report it immediately to phishing@irs.gov with the subject heading of “Phishing Scam”.

The Taxpayer Advocate Service Scam

Lastly, we have yet another new twist on the old IRS impersonation phone scam. In this version, the scammers claim to be associates for the Taxpayer Advocate Service (TAS) group. TAS is in fact a legitimate organization, independently run within the IRS. It’s purpose is to help protect taxpayers rights and act as advocates on behalf of the taxpayer.

Unfortunately scammers use this to their advantage, pretending to be from TAS and offering to help the taxpayer with their ‘situation’. If you return the call to these scammers they will attempt to elicit as much sensitive information as they can from you under the auspices of claiming you owe unpaid amounts, have an unexpected refund, etc, etc.

Save yourself a ton of grief and report the caller ID and number to phishing@irs.gov with the subject heading of “IRS Impersonation Scam”.

The common red flag with all these scams is how they will attempt to reach you in a manner that the IRS simply doesn’t follow. If and when the IRS needs to communicate to a taxpayer, they will always do so first by mail. And yes, there are plenty of snail mail scammers too. If you find yourself in any doubt, the best way to confirm you’ve been contacted by the real IRS is to go to IRS.gov or call them directly at 800-829-1040.

You work hard for your money. Don’t let someone else steal it away from you.