Avoid Coronavirus Related Scams Tied to Economic Impact Payments

On March 27, 2020, the U.S. House and Senate passed the CARES Act to provide financial benefits to those negatively affected by COVID-19. One of the most popular aspects of the bill, the direct payments to citizens, are expected to begin going out in two to three weeks. Recently, the IRS issued a warning to taxpayers to be cautious of scams related to these stimulus payments and how they can lead to tax fraud and identity theft.

“We urge people to take extra care during this period. The IRS isn’t going to call you asking to verify or provide your financial information so you can get an economic impact payment or your refund faster,” said IRS Commissioner Chuck Rettig. “That also applies to surprise emails that appear to be coming from the IRS. Remember, don’t open them or click on attachments or links. Go to IRS.gov for the most up-to-date information.”

These attempts to defraud and scam others can come via email, text, website ads, and even social media attempts requesting money or personal information.

“History has shown that criminals take every opportunity to perpetrate a fraud on unsuspecting victims, especially when a group of people is vulnerable or in a state of need,” said IRS Criminal Investigation Chief Don Fort. “While you are waiting to hear about your economic impact payment, criminals are working hard to trick you into getting their hands on it. The IRS Criminal Investigation Division is working hard to find these scammers and shut them down, but in the meantime, we ask people to remain vigilant.”

Retirees and The Elderly Are Targeted

The IRS and its Criminal Investigation Division have reported new and evolving phishing schemes against taxpayers. In nearly all cases, the IRS will deposit economic impact payments into the bank account taxpayers previously provided on tax returns for direct deposit. Those taxpayers who have previously filed but not provided direct deposit information to the IRS will have the option to provide their banking information online through a newly designed secure portal on IRS.gov in mid-April. If the IRS does not have a taxpayer’s direct deposit information, a check will be mailed to the address on file. It’s important to make sure to never share deposit or banking information to anyone besides the IRS directly or to let others input information on your behalf into the secure online portal.

The IRS also reminds retired people who don’t normally file tax returns that they don’t need to take action to receive any economic impact payment they are eligible for. The IRS reminds retirees – including recipients of Forms SSA-1099 and RRB-1099 −  that no one from the agency will be reaching out to them by phone, email, mail or in person asking for any kind of information to complete their economic impact payment, also sometimes referred to as rebates or stimulus payments. The IRS is sending these $1,200 payments automatically to retirees – no additional action or information is needed on their part to receive this.

The IRS reminds taxpayers that scammers may:

• Emphasize the words “Stimulus Check” or “Stimulus Payment.” The official term is economic impact payment.
• Ask the taxpayer to sign over their economic impact payment check to them.
• Ask by phone, email, text or social media for verification of personal and/or banking information saying that the information is needed to receive or speed up their economic impact payment.
• Suggest that they can get a tax refund or economic impact payment faster by working on the taxpayer’s behalf. This scam could be conducted by social media or even in person.
• Mail the taxpayer a bogus check, perhaps in an odd amount, then tell the taxpayer to call a number or verify information online in order to cash it.

Reporting Coronavirus-related Scams or Other Phishing Attempts

Those who receive unsolicited emails, text messages or social media attempts to gather information that appear to be from either the IRS or an organization closely linked to the IRS, such as the Electronic Federal Tax Payment System (EFTPS), should forward it to phishing@irs.gov.

Taxpayers are encouraged not to engage potential scammers online or on the phone. Learn more about reporting suspected scams by going to the Report Phishing and Online Scams page on IRS.gov.

Official IRS information about the COVID-19 pandemic and economic impact payments can be found on the Coronavirus Tax Relief page on IRS.gov. The page is updated quickly when new information is available.

Our Accountants Are Here to Support You

If you have questions about how the CARES Act or any economic impact payments affect your tax preparation, or want to learn more about protecting yourself and your finances, we are here to support you in any way we can. Reach out to us today at  (919) 872-0866 or fill out our contact form to schedule a consultation.

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