I know there’s an answer[I]

 

The “Dirty Dozen” list of 2020 tax scams

The impetus for this article was the July 16th communication from IRS that gives the public information on the various types of tax frauds that prey on both the vulnerable and those that ignore detail (https://www.irs.gov/newsroom/dirty-dozen). This report has been a public service in this format since 2014. The agency reminds the public that they need to be extremely vigilant during tax season and times of crisis such as this pandemic. Please read the entire the document but some highlights (or lowlights if you will) are:

  • Phishing—the schemes are blasted to many people to try and access personal identifying information or financial account information, including account numbers and passwords. IRS warns that “[m]ost of these new schemes are actively playing on the fear and unknown of the virus and the stimulus payments.”
  • Fake Charities—this is where such low rent individuals will create phony websites that use names similar to legitimate charities to attempt to fool people to send money or provide personal financial information. IRS adds that they may even claim to be working for or on behalf of the IRS to help victims file casualty loss claims and get tax refunds. Always remember, IRS will NOT call you!
  • Senior Fraud—while it may seem positive that seniors are utilizing technology more and more, “that gives scammers another means of taking advantage.” IRS warns that seniors “need to be alert for a continuing surge of fake emails, text messages, websites and social media attempts to steal personal information.”

There are a number of other scams in the list such as ransomware, payroll and HR, return preparation fraud and other attempts to take advantage of the public. The list, and the accompanying examples and other resources (both at IRS and other partner agencies) are excellent awareness and training tools for all financial crime prevention community members. The best part - it is all free!

The Importance of Staying Current

As members of the AML/Financial Crime prevention community, we are constantly seeking methods or delivery mechanisms to both stay current with trends and to learn how to improve compliance and detection. While the original goal for this post was to spotlight the “Dirty Dozen” list, it seemed worthwhile to also emphasize the volume of valuable information being disseminated by the Internal Revenue Service “IRS Newswire.”

For example, this week, IRS reminded the public that the cash transaction reporting requirements for trades and businesses (Form 8300) “helps law enforcement combat money laundering, tax evasion, drug dealing, terrorist financing and other criminal activities.” The notice explains the reporting requirements, the covered entities, reminds filers that they cannot disclose to their customer if they checked the “suspicious transaction” box on the form (note: it’s a felony).

In early June, the IRS issued another release on frauds related to COVID-19 and warned that there has been a:

“tremendous increase in phishing schemes utilizing emails, letters, texts and links. These phishing schemes are using keywords such as "Corona Virus," "COVID-19," and "Stimulus" in varying ways. These schemes are blasted to large numbers of people known by the bad actors in an effort to get personally identifying information or financial account information to include account numbers and passwords. Most of these new schemes are actively playing on the fear and unknown of the virus and the stimulus payments.”

You do your institution or firm a disservice if you haven’t signed up for these and similar notices from law enforcement. [ii]

 

Thanks to a Tremendous Public Servant

Being privileged to be a long-standing part of the AML community, I have had opportunities to work with a number of dedicated public servants who value (as we do) the concept and reality of public-private partnerships. I believe it is so important to recognize those individuals whenever we get that chance. With the announcement by IRSCI Chief Don Fort that he is retiring in September, I want to make sure that our community notes Don’s commitment to the great work of his agency but also his unwavering support for outreach and partnership to the private sector.

We can only succeed through collaboration, cooperation and communication throughout the community and Don has continued to emphasized all of that.

Thanks Don and we look forward to continued partnership in your next endeavor!

 

[i] “I Know There’s an Answer” is from arguably the greatest rock album of all time Pet Sounds, by the Beach Boys, released in 1966. If you get a chance to re-listen to the whole album, do it. You will not be disappointed.

[ii] IRS Newswire, FBI Email Updates and DHS Updates