IRS Explains the Coronavirus Stimulus Scam
Last Saturday, Taxing Subjects spotlighted a phishing scam that emerged after legislators passed the CARES Act, which distributes economic impact payments to help recover from financial hardships caused by COVID-19. Today, the IRS outlined common tactics used by these scammers, as well as briefly explaining the economic impact payment process.
What is the ‘coronavirus stimulus scam?’
Scammers are posing as government officials and contacting targets to request information they say is required to process coronavirus stimulus payments. Unfortunately, they are now using every tactic possible, from email and phone scams to text messages, social media, and fake websites.
As IRS Criminal Investigation Chief Don Fort points out in the press release, “History has shown that criminals take every opportunity to perpetrate a fraud on unsuspecting victims, especially when a group of people is vulnerable or in a state of need.” To avoid becoming a victim of this latest phishing scam, the agency suggests keeping an eye out for communications that use any of these common tactics:
- [Emphasizing] the words “Stimulus Check” or “Stimulus Payment.” The official term is economic impact payment.
- [Asking] the taxpayer to sign over their economic impact payment check to them.
- [Asking] by phone, email, text, or social media for verification of personal and/or banking information saying that the information is needed to receive or speed up their economic impact payment.
- [Suggesting] 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.
- [Mailing] the taxpayer a bogus check, perhaps in an odd amount, then [telling] the taxpayer to call a number or verify information online in order to cash it.
Remember, the IRS will not request information to process “stimulus payments” by phone, email, text, or social media. It turns out that most economic impact payments will be issued automatically.
What is the real economic impact payment process?
“In most cases, the IRS will deposit economic impact payments into the direct deposit account taxpayers previously provided on tax returns,” the IRS explains. “Those taxpayers who have previously filed but not provided direct deposit information to the IRS will be able to provide their banking information online to a newly designed secure portal on IRS.gov in mid-April.”
While the IRS generally uses recently filed tax returns to determine economic impact payment eligibility, the agency says that retirees who don’t have a filing requirement—Social Security recipients, in particular—do not have to do anything to receive their payment. (At this time, it remains unclear how the IRS will issue payments to other taxpayers who aren’t required to file.)
Just like a standard tax refund, those who don’t set up a direct deposit account will receive a physical check in the mail.
What should I do if I am targeted by the stimulus scam?
If someone calls asking for information needed to process a stimulus payment, hang up the phone; the IRS does not want you to interact with scammers. Similarly, if you get an email or message on Facebook asking for that information, do not respond, and do not click on any embedded links. Instead, the IRS wants you to report the incident to follow the directions on their Report Phishing and Online Scams webpage.
Source: IR-2020-64
MEA Tax Advisors