uTax is sharing this important industry news from the IRS and encourage you to take time to read this information so that you are aware of the tactics being used and the associated risks to both tax professionals and your clients.
- “The Dirty Dozen is an annual IRS list of 12 scams and schemes that put taxpayers and the tax professional community at risk of losing money, personal data and more. Some items on the list are new, and some make a return visit. While the list is not a legal document or a formal listing of agency enforcement priorities, it is intended to alert taxpayers, businesses and tax preparers about scams at large“.
Listed below are excerpts for the first two scams recently announced by the IRS. Please click on the link to read the news release in it’s entirety as they both contain additional details, instructions and helpful resources. uTax will share other noteworthy listings from the 2023 Dirty Dozen as they are published and you can also check back 24/7 on the IRS Dirty Dozen page | Español at IRS.gov.
This IRS page is also available on your uTax Resource Center > Industry Links > IRS Resources section > Dirty Dozen.
IR-2023-49, March 20, 2023 – IRS Opens 2023 Dirty Dozen with Warning about Employee Retention Credit claims; Increased Scrutiny Follows Aggressive Promoters Making Offers Too Good To Be True | Español
EXCERPT ONLY (click on link above or Read More below to access entire news release). WASHINGTON — In a further warning to people and businesses, the Internal Revenue Service added widely circulating promoter claims involving Employee Retention Credits as a new entry in the annual Dirty Dozen list of tax scams.
For the start of the annual Dirty Dozen list of tax scams, the IRS spotlighted Employee Retention Credits following blatant attempts by promoters to con ineligible people to claim the credit. Renewing several earlier alerts, the IRS highlighted schemes from promoters who have been blasting ads on radio and the internet touting refunds involving Employee Retention Credits, also known as ERCs. These promotions can be based on inaccurate information related to eligibility for and computation of the credit.
“The aggressive marketing of these credits is deeply troubling and a major concern for the IRS,” said IRS Commissioner Danny Werfel. “Businesses need to think twice before filing a claim for these credits. While the credit has provided a financial lifeline to millions of businesses, there are promoters misleading people and businesses into thinking they can claim these credits. There are very specific guidelines around these pandemic-era credits; they are not available to just anyone. People should remember the IRS is actively auditing and conducting criminal investigations related to these false claims. We urge honest taxpayers not to be caught up in these schemes.”
IR-2023-51, March 21, 2023 – Watch Out for Scammers Using Email and Text Messages to Try Tricking People During Tax Season | Español
EXCERPT ONLY (click on link above or Read More below to access entire news release). WASHINGTON — With the filing deadline quickly approaching, the Internal Revenue Service today urged everyone to remain vigilant against email and text scams aimed at tricking taxpayers about refunds or tax issues.
Taxpayers and tax professionals should be alert to fake communications posing as legitimate organizations in the tax and financial community, including the IRS and states. These messages arrive in the form of an unsolicited text or email to lure unsuspecting victims to provide valuable personal and financial information that can lead to identity theft. There are two main types:
- Phishing is an email sent by fraudsters claiming to come from the IRS or another legitimate organization, including state tax organizations or a financial firm. The email lures the victims into the scam by a variety of ruses such as enticing victims with a phony tax refund or frightening them with false legal/criminal charges for tax fraud.
- Smishing is a text or smartphone SMS message that uses the same technique as phishing. Scammers often use alarming language like, “Your account has now been put on hold,” or “Unusual Activity Report” with a bogus “Solutions” link to restore the recipient’s account. Unexpected tax refunds are another potential target for scam artists.
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. Never click on any unsolicited communication claiming to be the IRS as it may surreptitiously load malware. It may also be a way for malicious hackers to load ransomware that keeps the legitimate user from accessing their system and files.
Your uTax Team