Avoid Elevated Risks of Fraud and Other Financial Scams Related to COVID-19 by Rick D. Bazzani, CPA
Posted on June 26, 2020
by
Rick Bazzani
The COVID-19 pandemic has not slowed the pace of financial crimes targeting taxpayers. In fact, the IRS Criminal Investigation division (CI) has noted an increase in coronavirus-related scams seeking to steal taxpayers’ money and personal information. Reducing your risks of falling victim to these schemes requires you to take precautionary measures to secure your data and recognize the tell-tale signs of a potential scam.
Some of the more common financial scams identified by CI include the use of COVID-19 Economic Impact Payments to steal personal information and money, soliciting donations for fake charities, and offering taxpayers opportunities to invest early in bogus companies that purport to be working on a vaccine. In addition, CI has seen a wide range of scams related to sales of fake at-home test kits, cures, vaccines, pills and personal protective equipment (PPE) that are never delivered. In many instances, scammers use emails, letters, texts and links to create these phishing schemes and scare taxpayers into sharing their personally identifying information or financial account information.
To protect yourself from these financial frauds and identity theft, the IRS reminds you to take the following steps:
- Do not divulge your personal information via phone, email or text to anyone claiming to be from the IRS. The agency will never use these methods to request or verify your identity. Do treat personal information like cash – don’t hand it out to just anyone.
- Learn to recognize phishing emails, texts and telephone calls.
- Do not click on links or download attachments contained in unsolicited emails, even if it appears that those messages come from someone that you know.
- Do not assume internet advertisements, pop-up ads or emails are from reputable companies. If an ad or offer looks too good to be true, take a moment to check out the company behind it.
- Never download “security” software from a pop-up ad. A pervasive ploy is a pop-up ad that indicates it has detected a virus on the computer. Don’t fall for it. The download most likely will install some type of malware. Reputable security software companies do not advertise in this manner.
- Be proactive managing your computer security by using anti-virus software and encryption protection for wireless networks.
- Protect your data by using strong passwords containing a mix of at least 10 letters, numbers and special characters.
- If you are eligible to receive Economic Impact Payments of as much as $1,200 for individuals or $2,400 for married couples (and up to $500 for each qualifying child), the IRS will either deposit your stimulus payment directly into the bank account you listed on your 2019 or 2018 tax return, or it will mail a paper check directly to the last address the IRS has on file for you. The IRS does not charge a fee to issue the payment.
Coronavirus-related (COVID-19) scams should be reported to the National Center for Disaster Fraud (NCDF) at 1-866-720-5721 or to the IRS at phishing@irs.gov. If you are a victim of Economic Impact Payments fraud or theft, you can make a report to the Treasury Inspector General for Tax Administration (TIGTA) TIPS.TIGTA.GOV.
About the Author: Rick D. Bazzani, CPA, is a senior manager in the Tax Services practice of Berkowitz Pollack Brant Advisors + CPAs, where he provides individuals and business owners with a broad range of tax-efficient estate, trust and gift-planning services. He can be reached in the CPA firm’s Ft. Lauderdale, Fla., office at (954) 712-7000 or at info@bpbcpa.com
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