The IRS has issued an “extra caution” warning about multiple scams involving tax refunds and pandemic-related payment schemes that are seeking to defraud taxpayers and illegally obtain sensitive information.
“The Internal Revenue Service warned taxpayers today to be on the lookout for a summer surge of tax scams as identity thieves continue pounding out a barrage of email and text messages promising tax refunds or offers to help ‘fix’ tax problems,” said the agency in a July 21 press release. The latest set of scams touches on multiple topics like Economic Impact Payments, tax refunds, and potential IRS bans.
“These scams are riddled with spelling errors and awkward phrasing, but they consistently try to entice people to click on a link,” said the agency.
IRS Commissioner Danny Werfel said that the IRS is now “seeing a wave of these summer scams relentlessly pounding taxpayers.”
“People are being flooded with these email and text messages, but we want them to avoid getting swept up in these terrible scams. Taxpayers should be wary; remember, don’t click on links from questionable sources,” he reiterated.
Economic Impact Payment Scheme Scam
The IRS highlighted five main scams targeting taxpayers, out of which the Economic Impact Payment scheme scam is the “highest volume email scheme the IRS is seeing.”
In this scam, emails are sent to taxpayers making claims they are eligible for a third round of Economic Impact Payments—a scheme instituted during the COVID-19 crisis to provide relief for American citizens.
However, the third round of these payments already happened back in 2021. But even as payments have ceased, the scams related to it have evolved, warned the agency.
Tax forms from previous years are displayed at Latino Taxes in Oakland, Calif., on April 10, 2007. (Justin Sullivan/Getty Images)
The IRS is seeing hundreds of taxpayers forwarding emails related to this scam each day, with thousands of such emails reported since the July 4 holiday. The emails routinely have spelling errors and factual inaccuracies.
The emails urge people to click on links to complete their applications in order to receive benefits. However, the link takes the user to a webpage where hackers attempt to obtain valuable personal information.
A sample of the scam mail as provided by the IRS:
“Dear Tax Payer, We hope this message finds you well. We are writing to inform you abount an important matter regarding your recent tax return filing. Our record indicate that we have received your tax return for the fiscal inconsistencies or missing information that require your attention and clarification. You will receive a tax refund of $976.00 , We will process this amount once you have submitted the document we need for the steps to claim your tax refund. Sender : INTERNAL REVENUE SERVICE”
Employee Retention Credit Scam
A second scam is the misleading “you may be eligible for the ERC” scheme. The Employee Retention Credit (ERC) is a pandemic-related credit available to employers.
“Scam promoters are luring people to improperly claim the ERC with ‘offers’ online, in social media, on the radio, or through unsolicited phone calls, emails and even mailings that look like official government letters but have fake agency names and usually urge immediate action,” said the press release.
“It’s important to watch for warning signs such as promoters who say they can quickly determine someone’s eligibility without details, and those who charge up-front fees or a fee based on a percentage of the ERC claimed.”
The IRS added, “Anyone who improperly claims the ERC must pay it back, possibly with penalties and interest. Eligible employers who need help claiming the ERC should work with a trusted tax professional. False ERC claims were so widespread this year that the IRS added them to its annual Dirty Dozen list of tax scams.”
SMS Scams
The “claim your tax refund online” scheme urges people to click on links to get their refunds.
A sample of such a scam message:
“We checked an error in the calculation of your tax from the last payment, amounting to $ 927,22. In order for us to return the excess payment, you need to create a E-Refund, after which the funds will be credited to your specified bank. Please click below to claim your tax refund. If we are unable to complete within 3 days, all pending will be cancelled.”
An engineering student takes part in a hacking challenge near Paris on March 16, 2013. (Thomas Samson/AFP via Getty Images)
An engineering student takes part in a hacking challenge near Paris on March 16, 2013. (Thomas Samson/AFP via Getty Images)The “help you fix-it” scheme is a text scam that attempts to convince the target that there is a problem with their tax return and encourages them to click a link to resolve the problem. In the messages, the criminals use names that sound official, like “govirs-accnnt2023.” Like other scams, there tends to be misspelling and factual inaccuracies.
A sample of such a scam: “MSG … IRS: You federal return was ban-by the IRS. Don’t worry, we’ll help you fix it. Click this link.”
Scammers are also using traditional mail to defraud taxpayers. Dubbed the “delivery service” scam, it involves “a mailing that arrives in a cardboard envelope from a delivery service. The enclosed letter includes the IRS masthead and wording that the notice is ‘in relation to your unclaimed refund.’”
The IRS encouraged people who have been exposed to such scams to send an email to phishing@irs.gov. Those who are victims of such schemes and have clicked links and submitted personal information can file a complaint with the Treasury Inspector General for Tax Administration.
“The IRS never initiates contact with taxpayers by email, text, or social media regarding a bill or tax refund,” the agency clarified.
Widespread Identity Theft
Identity theft of taxpayers is a major issue at the IRS. Criminals usually use the stolen information about a taxpayer to file returns and claim tax refunds.
According to a May 10 report (pdf) by the U.S. Treasury, the IRS identified almost 1.1 million tax returns as being potentially fraudulent for the 2023 filing season as of March 2. The 1.1 million potentially fake returns had a refund claim totaling around $6.3 billion.
In a statement from March, IRS commissioner Werfel had said that “email and text scams are relentless, and scammers frequently use tax season as a way of tricking people.”
“With people anxious to receive the latest information about a refund or other tax issue, scammers will regularly pose as the IRS, a state tax agency, or others in the tax industry in emails and texts,” he said.
“People should be incredibly wary about unexpected messages like this that can be a trap, especially during filing season.”
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