Fraud is a constant struggle in the tax world. We’ve seen natural disaster related fraud, identity theft, tax fraud, tax preparer fraud… Now we have one more to be vigilant about: COVID-19 scams. The IRS recently sent out a notice warning the public about COVID-19 related fraud. The notice calls to attention a variety of Economic Impact Payment (EIP) and other financial related scams targeting taxpayers during these uncertain times.
According to IRS Commissioner Chuck Rettig, “The IRS is fully focused on protecting Americans while delivering Economic Impact Payments in record time. The pursuit of those who participate in COVID-19 related scams, intentionally abusing the programs intended to help millions of Americans during these uncertain times, will long remain a significant priority of both the IRS and IRS-CI.”
Current COVID Related Scams
The scams run the gamut but are mainly (as usual) focused on getting taxpayer information. They include:
- Use the COVID-19 Economic Impact Payments as cover for schemes to steal personal information and money.
- Stealing EIPs from taxpayers.
- Organized selling of fake at-home test kits.
- Offers to sell fake cures, vaccines, pills and advice on unproven treatments for COVID-19.
- Selling medical supplies through the creation of fake shops, websites, social media accounts and email addresses where the supplies are never received once the payment is made.
- Setting up fake charities soliciting donations for individuals, groups and areas affected by the disease.
- Offering opportunities to invest early in companies working on a vaccine for the disease.
- Phishing schemes using keywords such as “Corona Virus,” “COVID-19,” and “Stimulus” in varying ways.
All of these schemes should be communicated to clients so that they don’t fall victim to criminals who are playing off of people’s fear and uncertainty. You should also share where to report these schemes when you see them to help our agencies fighting against them.
In addition, there are also several businesses who are creating fraudulent claims to gain PPP or other small business loans. Make sure you are reaching out to clients to help with questions around applying for loans. This Small Business Resource Guide is a good piece of information to share.
Where to report fraud/scams
- Coronavirus-related (COVID-19) scams: the National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or submitted through the NCDF web Complaint Form
- Fraud or theft of Economic Impact Payments: Treasury Inspector General for Tax Administration (TIGTA)
- Phishing attempts can be reported to the IRS by emailing firstname.lastname@example.org
The Department of Justice also has a great list of schemes and tactics to be weary of including robocalls, cryptocurrency fraud schemes, healthcare related schemes, unsolicited requests for your Medicare information, smartphone apps or websites that claim to be a government office associated, and more. This DOJ information page has lots of great information around the schemes they are seeing.
Criminals will always use moments like this one to exploit people. COVID-19 is no different. Stay alert and informed, and be sure your clients are as well.