The Internal Revenue Service (IRS) has recently reported a surge in fraudulent activities, specifically during the summer season. These fraudulent schemes frequently claim to resolve tax issues or promise tax refunds. As a small business owner, it’s crucial for you to be aware of these scams to protect your organization’s financial records and overall business health.
The IRS’s dedicated phishing email account, [email protected], has received many complaints, underscoring the seriousness of the situation. This article will guide you through the various types of scams you need to be aware of to protect your small business.
Types of Tax Scams
Economic Impact Scam
The economic impact payment scam is one of the most common. It incorporates a URL embedded within the message, guiding victims to a phishing site to steal their personal information. This scam has been circulating since 2021 and has continually been updated and modified.
Always remember that the IRS never initiates contact with taxpayers via email, text messages, or social media channels about a bill or tax refund. IRS Commissioner Danny Werfel recently restated the importance of remaining alert due to increased scams.
Email and Text Phishing
Besides the economic impact scams, the IRS has pinpointed and reported several other fraudulent schemes. One includes deceptive emails that coax individuals into claiming their tax refunds online. These emails typically aim to direct recipients to a false IRS website where their sensitive information can be stolen.
Another widespread fraudulent scheme involves misleading text messages that notify individuals that their tax return has been denied or “banned” by the IRS. These messages, sent by scammers pretending to represent the IRS, often lure individuals into clicking a link that leads them to a phishing website or prompts them to divulge personal information.
Such fraudulent emails and text messages usually exhibit several red flags that can help individuals recognize them as scams. These can include spelling mistakes, grammatical errors, and awkwardly phrased sentences. Moreover, these messages may employ high-pressure tactics, urging the recipient to act immediately or face dire consequences.
Furthermore, they might use a generic greeting instead of your name or come from an email address that doesn’t match the IRS’s official website address. Just another reminder that the IRS will never contact you or your business via email or text.
Employee Retention Credit
Another scam to be aware of involves bogus claims of eligibility for the Employee Retention Credit (ERC). The ERC is a tax credit introduced during the pandemic to aid employers. Only certain employers qualify for this credit. Still, fraudsters claim they can determine eligibility promptly without detailed scrutiny and often charge fees upfront or based on a percentage of the ERC claimed. As a small business owner, you must understand how to claim the ERC legitimately to avoid these scams.
False Refunds
Identity thieves have also been exploiting taxpayers’ interest in overlooked refunds. These schemes suggest that recipients have missed out on tax refunds, and one such scam instructs victims to claim their tax refund online.
The IRS has also highlighted a scam delivered via traditional mail. This scheme involves a letter in a cardboard envelope delivered by a courier. The letter, containing the IRS masthead, informs the recipient about an unclaimed refund.
Guidance from the IRS
In order to mitigate the impact of these scams, the Internal Revenue Service (IRS) has provided specific guidelines to help taxpayers protect themselves and ensure the authorities are promptly alerted.
Should you receive any suspicious emails that you believe to be a scam, or if you yourself have fallen victim, inform the IRS directly at [email protected]. This action serves two purposes: it allows the IRS to investigate the source of the scam, and it helps them in their ongoing efforts to thwart such cybercrimes.
At the same time, it is crucial to file a complaint with the Treasury Inspector General for Tax Administration (TIGTA). This is an internal IRS organization that handles issues related to tax administration, including fraudulent activities and scams.
To better understand how to protect yourself moving forward, the IRS suggests visiting www.identitytheft.gov and www.irs.gov/identity-theft-central. These resources provide invaluable information about identity theft protection, measures to prevent future scams, and steps to take if your identity has been compromised.
Conclusion
Tax scams have become a significant challenge for individuals and businesses alike, especially during summer. As a business owner, it is necessary to stay informed, and this article has equipped you with the knowledge to identify such scams and take proactive measures against them.
Keep in mind the IRS will never reach out through email, text, or social media channels. Through awareness and timely action, we can collectively reduce the impact of these fraudulent schemes and ensure the security of our businesses. So, stay informed, stay alert, and keep your organization safe from tax fraudsters.
How FINSYNC Can Help
FINSYNC allows you to run your business on One Platform. You can send and receive payments, process payroll, automate accounting, and manage cash flow. To learn more about how we can help your business start, scale, and succeed, contact us today.