Beware of Stimulus and Tax Scams
April 22, 2021
It’s stimulus season and tax season at once, and scammers couldn’t be happier. They know that taxpayers are eager to get their hands on their stimulus payments and tax refunds. As consumers are working to file their taxes before the May 17 deadline, all that paperwork and payments mean people may be letting their guard down. For a scammer, nothing could be better!
The IRS is warning of a surge in scams as the tax agency continues processing tax returns and distributing stimulus payments to eligible adults who have not yet received them. Here’s all you need to know about the latest round of stimulus and tax scams:
How the scams play out
In the most recent IRS-related scams, scammers will con victims into filing phony tax returns, steal tax refunds or stimulus payments or impersonate the IRS to get victims to sign documents or share personal information, such as Social Security numbers or checking account numbers. The scams are pulled off via email, text message or phone. Sometimes, victims will be directed to another (bogus) website where their device will be infected with malware. Other times, the victim receives a 1099-G tax form for unemployment benefits they never claimed or received, because someone has filed for unemployment under their name. Unfortunately, the losses incurred through most of these scams can be difficult or impossible to recover.
What you need to know
- The IRS will never make contact by phone or email. If there’s an issue with your taxes or stimulus payment, the agency will communicate by snail mail first.
- There is no “processing fee” to be paid before you can get your stimulus payment or tax refund.
- The IRS is not sending out text messages about stimulus payments.
- There is no need to take any action to receive your stimulus payment. Likewise, aside from filing your tax return, there’s nothing you need to do to get your tax refund.
If you’ve been targeted
If you receive a suspicious phone call, text message or email that has allegedly been sent by the IRS, do not engage with the scammer. Block the number on your phone and mark the email as spam.
If you are a victim
If you are the victim of identity theft related to taxes or stimulus payments, there are steps you can take to mitigate the loss.
If you received a 1099-G for unemployment benefits you’ve never filed for or received, it’s best not to ignore it. Contact your state’s unemployment office to report the fraud. It should be able to send you a corrected 1099-G showing you did not get any benefits.
First, report the scam to the correct authorities. If a fraudulent tax return was filed in your name, the IRS will mail you a Letter 4883C or 6330C to verify your identity. You may also need to call the toll-free number provided on the letter and visit an IRS Taxpayer Assistance Center. After reporting the fraud, you’ll likely need to file a paper tax return. Complete an Identity Theft Affidavit (Form 14039) and attach it to the back of your paper return.
If you’ve mistakenly shared your information with a scammer and they’ve stolen your stimulus check, you will likewise need to let the IRS know. Visit Identitytheft.gov where you will receive a personal recovery plan that will hopefully minimize the damage done by the scammer and help you reclaim your lost funds.
It’s tax season and stimulus season, so it’s also scam season! Keep your guard up and follow the tips outlined here to prevent yourself from falling victim to one of the many circulating scams. Stay safe!