The IRS has issued a warning to tax preparers and other professionals in the tax sector. This alert stems from the emergence of “new and evolving” scams that, in some instances, utilize artificial intelligence to steal information from tax professionals and taxpayers.
The IRS has identified that these new scams involve criminals impersonating either new clients or the IRS itself. They employ phone calls and text messages as tools to access sensitive data. According to IRS Commissioner Danny Werfel, scammers have refined their tactics, specifically targeting tax professionals to gather valuable information that enables them to file seemingly legitimate tax returns.
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Scammers Posing as New Clients or the IRS
“Tax professionals must be vigilant about extremely clever scams that might appear as new business opportunities or even official communications from the IRS,” Werfel stated. “We continue to see these professionals being inundated with these fraud attempts, and they cannot afford to let their guard down.”
One particularly concerning method is known as the “new client” scheme. In this scenario, identity thieves pose as regular individuals looking to hire a tax preparer. They send emails with links that purportedly provide access to tax-related documents. However, these links either harvest the preparer’s login credentials or install malware on their computers, allowing scammers to access confidential data.
This type of scam isn’t entirely new but remains active throughout the year, especially targeting tax preparers who are seeking new clients during off-peak periods.
Frauds Involving Tax Identification Numbers
Another tactic increasingly observed this year involves the fraudulent acquisition of tax identification numbers assigned to tax preparers, such as the EFIN (Electronic Filing Identification Number), PTIN (Preparer Tax Identification Number), or CAF (Centralized Authorization File) number.
In the hands of a scammer, these numbers can be used to file false tax returns that appear legitimate. Criminals send emails or text messages that seem to originate from the IRS but actually direct the recipient to a website designed to capture the information entered.
Use of Artificial Intelligence in Scams
Artificial intelligence has become a tool for scammers. In some cases, AI-generated fake IRS letters are mailed to taxpayers, tax professionals, and their clients. These letters typically request sensitive information, such as Social Security numbers, birth dates, or banking details, under the guise of promising the complete cancellation of tax debt.
The IRS offers several recommendations for identifying and reporting these frauds. Suspicious emails can be forwarded to phishing@irs.gov. Tax professionals who fall victim to a security breach should contact their IRS Stakeholder Liaison and also reach out to the corresponding state tax agency. Information on state tax agencies can be found on the IRS website.
Additionally, the agency reminds tax professionals of the new Federal Trade Commission (FTC) requirements regarding data breach notifications. If 500 or more individuals are affected by an incident within a month, it must be reported.
Recommendations for Protection
To safeguard against these scams, the IRS advises tax professionals to adopt several security measures. These include:
- Verification of New Clients: Before accepting a new client, verify their identity using official documents and, if possible, references.
- Caution with Links and Attachments: Avoid clicking on links or opening attachments from unsolicited emails. Always verify the sender’s authenticity.
- Use of Security Software: Keep security software updated on all devices and perform regular scans to detect malware.
- Education and Training: Stay informed about the latest fraud tactics and participate in cybersecurity training programs.
- Secure Communications: Use secure and encrypted communication channels for exchanging sensitive information.
Impact of Scams on the Tax Sector
These scams pose a significant threat not only to tax professionals but also to their clients. The loss of sensitive information can result in severe financial and legal consequences for both individuals and businesses affected.
Tax professionals play a crucial role in the economy by helping taxpayers fulfill their tax obligations. However, their position also makes them an attractive target for criminals seeking to exploit any vulnerabilities.
The IRS emphasizes the importance of vigilance and proactive measures to protect against these sophisticated fraud attempts. By staying informed and implementing robust security practices, tax professionals can help safeguard their businesses and clients from these evolving threats. The IRS continues to work closely with the tax community to combat these scams and protect the integrity of the tax system.