Let’s Be Careful Out There—Tax Scams in the Time of COVID

tax scamsAnytime is a good time for a tax scam, but fraudsters often take special advantage of periods of high economic or community instability.


While the Internal Revenue Service (IRS) has taken efforts to warn consumers about schemes involving COVID-19, bad actors take aim at vulnerable people of all ages, at any time, who fall for a line in a telephone call or in an email.


It is pretty easy to understand why people could be more vulnerable to a tax crime or other fraud when they are stressed or under financial strain. Right now, business owners, workers, and consumers everywhere are facing business closures, furloughs, unemployment, and supply chain uncertainty on top of visceral fear of a potentially fatal contagious illness. These circumstances provide a heightened environment in which completely reasonable people may fall for the wheedling story of a huckster.


At the base of it, the scam remains the same. Let’s take a look at schemes to watch out for whenever you receive a questionable call or unsolicited email:

  • Stimulus checks: Any kind of predictable compensation coming from the government is a reliable resource for bad guys. In the past, and in the future, today it may be a stimulus check, tomorrow, a tax refund. Scammers may contact you electronically or on the telephone to ask you to verify personal information. Some of this messaging can be clever enough to spoof even sophisticated consumers. When personal identity information, like a social security number, is provided, scammers can submit a fraudulent tax return and redirect your stimulus check or tax refund their way.
  • Variations on a theme: Sometimes fraudsters take a threatening tone. Instead of contacting you to confirm your personal information so that you can receive monies due, they will advise that you owe a significant tax debt but provide you the opportunity to pay off your debt with no penalty. Some of these individuals have hacked access to your credit information and may offer enough semi-accurate information to convince you they are actually agents of the IRS. Remember that notice of an IRS criminal tax investigation arrives via mail in a letter. If you find yourself on a telephone call or on the receiving end of an email claiming to represent the IRS, terminate contact and contact the IRS directly.
  • Tax preparer fraud: Around tax time, be sure your accountant or tax preparer does not create a false income tax return to skim your refund for ill-gotten gains.
  • Data is King: Remember, the single most valuable asset in the US is data. Whether through phishing attacks in email, or telephone calls alleging you are involved in a tax controversy, bad actors seek personal information in order to take advantage of you, or a larger business or social network in which you may be a member. While a one-time stimulus check is a target, your passwords, financial or business data could make you a valuable third-party stepping stone into a larger network or company.


Staying aware of potential fraud activity at any time is important. If you have questions or concerns around your tax return, or become involved in tax litigation alleging a tax fraud—speak with an experienced criminal tax attorney.


Skilled legal guidance on tax audits or IRS tax questions

Located in Cleveland and Chicago, the tax lawyers at Robert J. Fedor, Esq., LLC help you navigate questions about your business tax return, or concerns you might have about offshore tax investments or reporting. When you need experienced tax advice, call 800-579-0997 or contact us.


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