The federal government is in the process of delivering cash to many U.S. citizens to help stimulate the economy, providing tax credits to individuals of $1,200 ($2,400 for joint filers) plus $500 for each qualifying child.
For those struggling to pay bills or who have lost their jobs, these payments can help them stay afloat during these extraordinary times. But it’s also a potential windfall for scammers, who are continually trying to find new ways to steal from unsuspecting individuals.
“Scammers prey on people’s emotions and weaknesses,” said Howard Silverstone, CPA and American Institute of CPAs (AICPA) Forensic and Litigation Services Fraud Task Force member. “Right now, people haven’t been going to work every day. They’re home with the kids. They’re stressed. They may have lost their jobs. They need that money. Scammers know this and are preying on it.”
The Federal Trade Commission reported that it received more than 1.4 million fraud reports in 2018, with people losing $1.48 billion. With the federal Coronavirus Aid, Relief and Economic Security (CARES) Act pumping $2 trillion into the nation’s economy, scammers have a $2 trillion incentive to try to steal from unsuspecting individuals. They particularly attack those who can least afford it.
“Criminals don’t only go after the rich and people with all the money,” said Silverstone. “Sadly, they often go after vulnerable people who don’t have money and who need it most.”
The IRS has said it will deposit these economic impact payments directly into the accounts of taxpayers who used direct deposit for their 2018 or 2019 taxes, those receiving Social Security payments or Railroad Retirement beneficiaries. The payments begin to phase out for taxpayers with adjusted gross incomes above $150,000 for joint filers, $112,500 for heads of households and $75,000 for other individuals. All others, including non-tax filers who do not submit a Form 1040, 1040A or 1040EZ, must register with the IRS to receive their payments via an online portal.
With funding being distributed so widely, scammers are leveraging several tools to try to separate individuals from that cash — most notably phishing emails, phone calls and texts. Fraudsters use these communications to spur people to provide personal information, falsely claiming the IRS needs to confirm Social Security numbers, bank account numbers or addresses before making payment. Once scammers have that information, they can steal money and identities.
Silverstone warns that the IRS never calls and never emails. Unless you’ve received notice via postal mail, any communications claiming to be from the IRS are likely fraudulent.
“For most of the people receiving this money, the IRS already has your information,” said Silverstone, adding that individuals should not respond to phone calls, emails or texts regarding payments.
Another tell-tale sign is the language used in communications. While the media and general public may refer to the $1,200 tax credits as “stimulus payments” or “stimulus checks,” the federal government does not use that terminology. Rather, the IRS refers to them as “Economic Impact Payments.”
“If you see things about the stimulus payment, it’s not from the IRS,” said Silverstone.
For more information, see the AICPA’s Coronavirus (COVID-19) Resource Center and Coronavirus (COVID-19) Forensic and Valuation Resources for resources, tools and other information to help individuals, tax filers, small business owners and others better manage their way through this pandemic.
The IRS has also compiled information to protect taxpayers and economic impact payment recipients.
The IRS reminds taxpayers that scammers may:
- Emphasize the words "Stimulus Check" or "Stimulus Payment." The official term is “Economic Impact Payment.”
- Ask the taxpayer to sign over their economic impact payment check to them.
- Ask by phone, email, text or social media for verification of personal and/or banking information, claiming that the information is needed to receive or speed up their economic impact payment.
- Suggest that they can get a tax refund or economic impact payment faster by working on the taxpayer's behalf. This scam could be conducted by social media or even in person.
- Mail the taxpayer a bogus check, perhaps in an odd amount, then tell the taxpayer to call a number or verify information online in order to cash it.
Reporting coronavirus-related scams or other phishing attempts
Those who receive unsolicited emails, text messages or social media attempts to gather information that appear to be from either the IRS or an organization closely linked to the IRS, such as the Electronic Federal Tax Payment System (EFTPS), should forward them to firstname.lastname@example.org.
Taxpayers are encouraged not to engage potential scammers online or on the phone. Learn more about reporting suspected scams by going to the Report Phishing and Online Scams page on IRS.gov.
Non-filers, those who do not submit a Form 1040, 1040A or 1040EZ, must apply via an online IRS portal to receive their payments. The IRS requests the following information from those individuals. Do not provide it to anyone other than the official IRS portal.
- Full name, current mailing address and an email address
- Date of birth and valid Social Security number
- Bank account number, type and routing number (if you have one)
- Identity Protection Personal Identification Number (IP PIN) you received from the IRS earlier this year (if you have one)
- Driver’s license or state-issued ID (if you have one)
- Name of each qualifying child
For more help during the pandemic, turn to the AICPA Coronavirus (COVID-19) Resource Center.