Each and every tax season, cybercriminals develop new, sophisticated schemes designed to fraudulently obtain payment and personal and financial information from individuals and businesses.  This year in particular, there has been an emphasis on aggressive schemes relating to the coronavirus pandemic, including identity theft, unemployment benefit fraud, and the Economic Impact Payments. These schemes are generally referred to as “phishing” scams and they come in many shapes and sizes. The IRS publishes notices of known phishing scams on its website under “Tax Scams/Consumer Alerts.” Some common types of tax-related scams include:

• IRS Criminal Investigation has seen a tremendous increase in phishing schemes utilizing emails, texts, robocalls and embedded links by using keywords such as "Coronavirus," "COVID-19," and "Stimulus,” especially on social media platforms
• Exploiting natural disasters and other situations such as the current COVID-19 pandemic by setting up fake charities to steal from well-intentioned people trying to help in times of need
• Threatening phone calls or “vishing” (voice phishing) impersonating the IRS
• “Ghost” tax return preparers that offer to prepare your return but refuse to sign and propose unconventional fee structures
• Emails claiming to be the IRS demanding payment or personal information, and often including attachments containing malware
• Emails impersonating payroll and human resource professionals at your place of business requesting your W-2 or other personal information
• Emails claiming to represent the Taxpayer Advocacy Panel (TAP) about a tax refund, trying to trick victims into providing personal and financial information

This is not an exhaustive list, nor will the IRS’s website highlight every possible form of scam you may encounter. Also, these schemes can happen anytime during the year, not just during tax season. If you receive a communication like this, you should never respond or click on any embedded links in an e-mail communication.

In our view, it’s equally as important to understand how the IRS actually communicates with taxpayers. Usually, any communication from the IRS will begin with a written notice sent to you via US mail.  Most importantly, the IRS does not initiate contact with taxpayers by email, text messages or social media channels to request personal or financial information.  The IRS may call you, but unlike many phishing scam calls, they will not make threats of fines or jail if you do not immediately respond or take some other action. 

Stay safe from cyber threats! Refrain from engaging potential scammers. Never respond to a threatening phone call or click on any embedded links in suspicious email communications.

If you do receive a communication and are unsure whether it is genuine or a phishing attempt, you can report instances directly online to the Treasury Inspector General for Tax Administration or contact them at 800-366-4484. We encourage you to contact your GW & Wade Counselor or you can reach out to us here with any questions on these schemes.

Investment advisory services offered through GW & Wade, LLC.

The information above is general and educational in nature and should not be considered legal or tax advice. Tax laws and regulations are complex and subject to change. GW & Wade cannot guarantee that this information is accurate, complete, or timely.  We make no warranties with regard to such information or results obtained by its use. Always consult an attorney or tax professional regarding your specific situation.

Clients of the firm who have specific questions should contact the GW & Wade Counselor with whom they regularly work. All other inquiries, including any inquiry concerning a potential advisory relationship with GW & Wade, should be directed to:

Laurie Wexler Gerber, Director of Marketing
GW & Wade, LLC
781-239-1188
lgerber@gwwade.com