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Scams and more scams: tax professionals also at risk

The challenges for tax compliance are legion, in the sense of many. The complexity of the tax code and budgetary constraints at the IRS that have resulted in reduced customer service are only two among numerous issues.

Another issue is of course the ongoing threat from scams aimed at accessing personal information and using that information to engage in fraud and identity theft.

In this post, we will update you on how scammers are going after not only taxpayers, but also tax professionals.

Scams in which fraudsters pose as revenue agents are of course nothing new. We wrote about them most recently in our August 14 post.

But such scams are remarkably persistent. And the IRS has had difficulty creating processes to deter them.

Indeed, this week brought more bad news on that front. The Treasury Inspector General for Tax Administration (TIGTA) found that the IRS gave out millions of dollars of refunds on returns that it had flagged as possibly fraudulent. The amount of erroneous refunds involved was more than $46 million.

The IRS acknowledged that it needs to fix the computer glitch that made these errors possible. But the IRS told TIGTA that it lacks the resources to commit to a timeline for doing so.

This is not a good time for the IRS to be lacking those resources. Another tax season is about to begin, and that tends to mean an uptick in scams aimed at identity theft.

Indeed, the IRS issued a warning this week that tax professionals should be wary of new phishing scams. One such scam involves an email that claims to be from the IRS, asking tax professionals to click on a link to update their information with the IRS.

In reality, however, this email is a phishing scam intended to obtain usernames and passwords, and with them the personal information needed for identity theft.

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