Computer hackers are actively taking advantage of the fears that most people feel when they see a communication from the IRS. Multiple businesses and individuals in 2019 have received emails and other electronic notices that purport to be from the IRS, when they are in fact, targets of a massive scam. When the recipients follow the instructions in the email, the hackers take control of their confidential personal and financial information. 

This tactic has become so prevalent that the IRS recently released an alert to remind everyone that the agency does not initiate contact with taxpayers by email, text messages, or social media. The tax attorneys at Baltimore’s Rosenberg Martin Greenberg LLP urge all businesses and individuals to remain wary of electronic communications that appear to be from the IRS and to follow some simple procedures to protect themselves from hackers and scammers.

The Anatomy of a Typical IRS Tax Scam

The common scenario usually plays out like this:

A person will receive an email that appears to be from the IRS with a subject line that refers to a “Taxpayer Advocacy Panel” or an “Automatic Income Tax Reminder.”  The substance of the email might instruct the recipient to click on a virus- or ransomware-infected link, to call a certain number, or to respond with identifying information such as bank account and social security numbers. The more pernicious scams claim that a warrant has been issued for the recipient’s arrest due to the non-payment of taxes. 

These fraudulent communications target both individuals and businesses. Small businesses are becoming favorite targets because they often do not have the internal systems or resources to block suspicious electronic communications. An overworked small business office manager can easily panic upon seeing a communication from the IRS and respond to that communication without considering its legitimacy.    

How Not to Become an IRS Scam Victim

Cybersecurity experts offer several suggestions on how businesses can avoid an IRS or other electronic communication scams:

  • Provide regular cybersecurity training for all employees, and instruct all employees not to open attachments in emails that come from unfamiliar sources;
  • Designate a point person to handle all communications with the IRS and other taxing authorities;
  • Never disclose personal or confidential financial information, including account numbers and login IDs, to unknown third parties;
  • Stay alert to evolving IRS tax scams, such as communications that instruct a recipient to use one-time passwords for an IRS login or that seek payments through non-conventional means, such as gift cards;
  • Understand that IRS tax scams occur throughout the year, and not just around tax filing or payment dates;
  • Contact the IRS any time you receive a communication that appears to be suspicious.

Repairing the Damage if You Fall Victim to an IRS Tax Scam

Contact the IRS and the Federal Trade Commission as soon as possible after you discover that you have become a victim of a tax scam. Also contact your insurance brokers, particularly if your business has cybersecurity insurance, to initiate a claim and recovery process. Your business’s ability to protect its ongoing viability may well be a function of how quickly you act to stem your losses and to prevent further damage.

Rosenberg Martin Greenberg LLP advises individuals and businesses from Baltimore to the nations. Call us to learn more about how we can assist in the aftermath of a damaging cyberattack.

Additional Resources:

  1. Tax Scams/Consumer Alerts.
  2. IRS Imposters are Using Fake Emails to Trick You: How to Spot a Scam.
  3. IRS Issues Warning on New Email Tax Scam.