IRS 2021 Dirty Dozen Scams

As you probably know, there are many scams to be aware of from people who would like to steal your identity and access your accounts. The IRS identifies the top ones each year, and they announce a “Dirty Dozen” list to alert the public to the most prevalent.

The IRS has announced their list for 2021. This year’s is a little different than in the past.

Where before they listed the scams with an explanation, this year they have been broken into four categories which are pandemic related, personal information cons, ruses focusing on unsuspecting victims, and schemes that persuade taxpayers into unscrupulous actions.

The IRS urges you to be on guard for yourselves and other family members.

This year’s scams include:

1. Economic Impact Payment Theft – Thieves try to steal your stimulus payments through sending text messages, sending e-mails, or making phone calls to request recipients to click a link to verify data. The IRS does not contact you through these methods to ask for Social Security numbers of financial information. Also be alert to mailbox theft where check payments mailed to you have been stolen.

2. Unemployment fraud leading to inaccurate 1099G forms – scammers took advantage of the pandemic by filing fraudulent unemployment claims using stolen personal information for individuals who did not have these funds disbursed to them. If you received a 1099G reporting compensation you were not paid, contact your state immediately to request a new form. File your tax return with the correct amount you received (if any).

3. Tax related phishing scams – There continues to be a surge of fake e-mails and text messages that appear to come from legitimate sources to collect personal and financial data and infect user devices by downloading malicious programs.

4. Phishing scams targeting tax professionals – The IRS warns tax professionals about phishing scams involving verification of Electronic Filing Identification Numbers (EFIN) and Centralized Authorization File (CAF) numbers.

5. Phishing new client scams – from those reaching out saying they just moved to the state and they have an urgent tax issue. They then send an attachment saying it’s their prior year return. The document has malware attached that is launched when the document is accessed.

6. Impersonator phone calls/vishing – The IRS has seen an increase in voice-related phishing, or ‘vishing,’ particularly from scams related to federal tax liens. Recipients of these calls should hang up before giving out any information.

7. Social Media scams – enable unscrupulous individuals to lurk on accounts and extract personal information to use against the victim. These cons may send emails impersonating the victim’s family, friends or co-workers.

8. Ransomware is on the rise – which is a form of malicious software (“malware”) designed to block access to a computer system by encrypting data or programs on information technology (IT) systems to extort ransom payments from victims in exchange for decrypting the information and restoring victims’ access to their systems or data. In some cases, in addition to the attack, the perpetrators threaten to publish sensitive files belonging to the victims, which can be individuals or business entities.

9. Fake charities – The IRS advises taxpayers to be on the lookout for scammers who set up fake organizations to take advantage of the public’s generosity. Scams requesting donations for disaster relief efforts are especially common on the phone.

10. Immigrant/senior fraud – IRS impersonators and other scammers are known to target groups with limited English proficiency as well as senior citizens. These scams are often threatening in nature. Legitimate IRS employees will not threaten to revoke licenses or have a person deported. These are scare tactics.

11. Offer in Compromise “mills” – misleading people with no chance of meeting the requirements while charging excessive fees, often thousands of dollars. The IRS reminds taxpayers to beware of promoters claiming their services are needed to settle with the IRS, that their tax debts can be settled for “pennies on the dollar” or that there is a limited window of time to resolve tax debts through the Offer in Compromise program. An “offer,” or OIC, is an agreement between a taxpayer and the IRS that resolves the taxpayer’s debt. You should be especially wary of promoters who claim they can obtain larger offer settlements than others or who make misleading promises that the IRS will accept an offer for a small percentage.

12. Unscrupulous tax return preparers – Although most tax preparers are ethical and trustworthy, taxpayers should be wary of preparers who won’t sign the tax returns they prepare, often referred to as ghost preparers. By law, anyone who is paid to prepare, or assists in preparing federal tax returns, must have a valid Preparer Tax Identification Number (PTIN). Paid preparers must sign and include their PTIN on the return.

It's imperative to protect yourself and loved ones from these scams. Becoming aware of the typical methods scammers use will help you avoid your personal and financial information from being compromised.