The IRS announced this week the most common tax scams for 2021 and pandemic-related scams have become a separate category. How has the agency said taxpayers should protect themselves from these tax frauds?
This week the IRS announced the Dirty Dozen for 2021 and this year's list will be separated into four separate categories. One of them is Pandemic-related Scams and this is why the agency has urged Americans to especially watch out for tax scams during the pandemic.
What has the agency said about these scams?
Impact Payment Theft
A continuing threat to individuals is from identity thieves who try to steal stimulus payments. This is why taxpayers should watch out for these red flags of a possible scam:
• Any text messages, random incoming phone calls, or emails inquiring about bank account information or requesting recipients to click a link or verify data should be deleted.
• Be alert to mailbox theft. Frequently check mail and report suspected mail losses to Postal Inspectors.
• Don't fall for stimulus check scams. The IRS has said on various occasions that it won't initiate contact by phone, email, text, or social media asking for Social Security numbers or other personal or financial information related to stimulus checks.
During the pandemic, many taxpayers lost their jobs and received unemployment compensation from their state. However, according to the agency, scammers also took advantage of the pandemic by filing fraudulent claims for unemployment compensation using stolen personal information, and payments made on these fraudulent claims went to the identity thieves.
This is why the agency reminds taxpayers to be on the lookout for receiving a Form 1099-G reporting unemployment compensation that they didn't receive.
The IRS has urged people in this situation to contact their appropriate state agency for a corrected form and if this cannot be obtained, taxpayers should complete their return claiming only the unemployment compensation and other income they actually received.