By Steve Tepper, CFP®, MBA
It should come as a surprise to no one, given the fear and uncertainty surrounding the global pandemic; the abundant stimulus, grant, and loan money flying about; and the tax-filing deadline, that grifters are out there in full force, looking to scam people. We are experiencing a triple play of scam opportunities.
The IRS recently released its top 12 most common deceptions for this year. Here are some highlights:
Fear phishing: There has been a big surge in phishing attempts with keywords such as coronavirus and COVID-19. These are usually large-scale email blasts intended to get you to open and follow a link where you provide personal identity information.
Charity scams: All these scams are awful, but something about the appeal to charitable giving that occurs during and after disasters gives this deception a special place at the top of the Hall of Shame. Emails and calls from organizations that look and sound a lot like legitimate charities will prey on your good heart.
The threatening phone call: “Federal agents have a warrant for your arrest and will arrive in 30 minutes.” This is a terrifying message, even though it is always a scam. I was a little freaked out the first time I got the call—can you imagine how panic-inducing this might be for an older person with any degree of mental impairment?
Social connection: The age of social media makes it relatively easy for a scam artist to research you, get a good profile of people close to you, and contact you, claiming to be a friend of a friend. Once they’ve earned your trust, there are many schemes they can run to get the information they need to rob you. This scam is targeting seniors as well, as more of them are becoming regular Facebook users.
CPA fraud: This year, most of us have not met with our accountants face-to-face to get our taxes filed. Fraudsters understand that with most brick-and-mortar businesses closed indefinitely, if not permanently, it’s easier to impersonate a professional practitioner, such as a CPA, tax attorney, or even financial planner. Just make up a room in the house to look like an office, hang a couple of fake diplomas, and you’ve got a convincing Zoom meeting setting. Once trust is established, people will send pretty much everything a criminal needs to rob them blind.
Generally, these scams follow a similar pattern: Use fear or trust to get someone to provide private information. Here are some important tips to keep in mind and to share with others, particularly your older loved ones:
The IRS will never call you about coronavirus payments, to ask for your bank account number to make a deposit or to withdraw an overpayment, or for anything else.
Any legitimate charitable organization will be happy to provide you with information, including their tax ID number (TIN or EIN), so that you can research them online at Charity Navigator or CharityWatch. If they hedge, hang up.
Even back in the day when you met with tax professionals face-to-face, you probably should have been getting their TIN and researching them (Florida Sunbiz is a good place to start) to make sure they were legitimate. But honestly, a professional-looking office made most of us skip that step. In the age of the Zoom meeting, it is critical to take these extra steps before sending confidential tax and investment information to a stranger.
If you receive an unsolicited email claiming to be the IRS or a related agency, report it to phishing@irs.gov. If you suspect you are the victim or intended victim of a scam, follow this link: https://www.treasury.gov/tigta/contact_report_scam.shtml. And if you have concerns about how any organization is handling your personal information, report it here: https://www.ftccomplaintassistant.gov/Information.
Source: “Top 12 Tax Scams Show Fraudsters Target Coronavirus Tax Relief: IRS” by Jeff Stimpson, Financial Planning Magazine, July 20, 2020.