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IRS highlights importance of fraud awareness

IRS highlights importance of fraud awareness

The Internal Revenue Service (IRS) is actively participating in International Fraud Awareness Week, underscoring the critical need for taxpayers to remain vigilant against scams and fraudulent schemes.

This initiative, which is an integral part of the IRS's year-round effort to combat tax fraud, emphasizes education and awareness as key defenses against these threats.

IRS office of fraud enforcement: a focused effort

The IRS Office of Fraud Enforcement (OFE) plays a pivotal role in ensuring compliance with tax laws and combating fraud. The OFE's mission includes enhancing fraud detection, identifying high-risk areas, and aiding in the development and submission of fraud referrals to the IRS Criminal Investigation division.

During International Fraud Awareness Week and beyond, the OFE remains dedicated to alerting taxpayers about scams and fraudulent tax avoidance schemes.

Vigilance against Employee Retention Credit (ERC) scams

A notable area of concern is the misuse of the Employee Retention Credit (ERC). The IRS has observed a surge in incorrect and fraudulent ERC claims. These scams often involve misleading promotions and offers that misrepresent the company's legitimacy and the credit's eligibility requirements.

Taxpayers are advised to be cautious of such deceptive tactics and to refer to the IRS's Employee Retention Credit Eligibility Checklist for accurate information.

Recognizing IRS impersonation scams

Taxpayers must be aware of common tactics used in IRS impersonation scams, which include unsolicited contact via email, text, social media, and phone calls.

The IRS emphasizes that it does not demand immediate payment through specific methods like prepaid debit cards or gift cards, nor does it threaten taxpayers with law enforcement action for unpaid taxes.

Being alert to these red flags can help prevent identity theft and other fraudulent activities.

Small businesses: a target for cybercriminals

Small businesses are particularly susceptible to cybercriminals.

The IRS advises these businesses to adopt best practices for cybersecurity, such as using multi-factor authentication, setting automatic updates for security software, backing up essential files, and enforcing strong password policies.

These measures are crucial in safeguarding sensitive business and customer information.

How to report suspected fraud

To report abusive tax schemes or suspicious tax preparers, individuals can use Form 14242 and submit it to the IRS Lead Development Center

Internal Revenue Service Lead Development Center
Stop MS5040
24000 Avila Road
Laguna Niguel, CA 92677-3405
Fax: 877-477-9135

The IRS also offers a Whistleblower Office for reporting, which can potentially lead to monetary rewards for individuals who provide crucial information on tax fraud.

Ines Zemelman, EA
Founder of TFX