‘Helpful’ Scammers Offer to Open Online Tax Accounts

The IRS is warning about schemes to steal personal information via phone calls, texts, and emails as the April 15 filing deadline approaches.

The Internal Revenue Service (IRS) building in Washington on Jan. 4, 2024. Madalina Vasiliu/The Epoch Times

The Internal Revenue Service (IRS) is warning taxpayers about fraudsters trying to steal personal information by offering help to open an IRS Online Account.

It’s the latest in a series of scam alerts the agency has issued in recent days.

IRS Online Account is a tool offering taxpayers access to details like payment history, current balance, copies of IRS notices, and more.

On April 1, the IRS warned taxpayers to specifically “watch out for scammers attempting to sell or offer help setting up an Online Account on IRS.gov. The goal for these criminals is getting personal tax and financial information that can be used to commit identity theft.”

The warning comes as the tax filing deadline, April 15, is less than two weeks away.

Criminals pose as “helpful” third parties who offer to open an IRS Online Account, making it seem like a complicated task requiring their assistance.

The fraudsters then ask for personal information, including home address, Social Security number, photo identification, and individual taxpayer identification number (TIN).

Criminals then sell the information or file fraudulent tax returns to claim refunds, open credit accounts, or obtain loans.

The agency advised citizens to open their own IRS Online Account without seeking third-party assistance.

“An Online Account at IRS.gov can help taxpayers view important details about their tax situation. But scammers have realized the sensitive information there is valuable to them, so they’re now focusing on tricking people that they need help setting up an account,” said IRS Commissioner Danny Werfel.

“This is another reminder that people should be wary of unexpected reach-outs from the IRS and other financial institutions. Taxpayers should avoid sharing sensitive personal data over the phone, email, or social media to protect themselves and avoid getting caught up in these scams.”

The IRS asked people to report individuals who promote “improper and abusive tax schemes,” as well as tax return preparers who knowingly prepare improper returns.

People can report such fraud by filling out a form and sending it to the following address together with supporting materials:

Internal Revenue Service Lead Development Center, Stop MS5040, 24000 Avila Road, Laguna Niguel, California 92677-3405, Fax: [phone].

Scams can also be reported to the IRS Whistleblower Office for a potential monetary reward.

The IRS scam alert comes as the agency launched its Direct File free online tax return filing service last month, with taxpayers from 12 states eligible to use it. On March 29, Mr. Werfel said the service was available for 19 million taxpayers in these states.

‘Dirty Dozen’ Scam Warnings

The recent IRS warning is the third in its “Dirty Dozen” series exposing various scams targeting taxpayers.

On March 28, the agency warned about phishing (email fraud) and smishing (text message fraud) “designed to steal sensitive taxpayer information.” Scammers send text and email messages to “trick the recipient into clicking a suspicious link, filling out personal and financial information, or downloading a malware file onto their computer.”

The phishing scam involves an email sent by scammers claiming to be the IRS.

“The email lures the victims into the scam with a variety of ruses such as enticing victims with a phony tax refund or threatening them with false legal or criminal charges for tax fraud,” the agency warns.

In such scams, criminals send a text or smartphone SMS that often use alarming language like, “Your account has now been put on hold” or “Unusual Activity Report.” The message will contain a fake “Solutions” link claiming to restore the account.

The IRS recommends that taxpayers avoid replying to or opening attachments of any message that claims to be from the IRS containing a request for personal information or tax details associated with a large investment, inheritance, or lottery.

“Posing as a trusted organization, friend or family member remains a common way to target individuals and tax preparers for various scams. Individuals should verify the identity of the sender by using another communication method, for instance, calling a number they independently know to be accurate, not the number provided in the email or text,” the agency said.

“The IRS initiates most contacts through regular mail and will never initiate contact with taxpayers by email, text or social media regarding a bill or tax refund.”

On March 29, the IRS asked businesses to be alert about “unscrupulous and aggressive promoters” who dupe taxpayers into making questionable Employee Retention Credit (ERC) claims.

ERC was a refundable tax credit aimed at ensuring that businesses kept employees on their payroll during the COVID-19 shutdowns.

“The IRS remains concerned that some ineligible businesses are being encouraged by marketers to submit an incorrect ERC claim; people should contact a trusted tax professional first to avoid potential IRS compliance action in the future,” the agency said.

Filing questionable claims for ERC can put businesses in “jeopardy of penalties, interest and potentially even criminal prosecution for claiming the ERC when they don’t qualify and aren’t entitled to it.”

The agency announced a moratorium on processing new ERC claims that were filed after Sept. 14, 2023.

Last month, the IRS said that erroneous ERC claims had topped $1 billion.