CARL WATTS & ASSOCIATES

November 14, 2016

Stay Alert for New Tax Scams
New technologies have always created new criminal opportunities, albeit the crimes committed are by no means new. Cybercrime, especially involving the internet, represents an extension of existing criminal behavior (alongside some novel illegal activities) and most cybercrime consists of attacks on information about individuals, corporations, or governments.

This year has proven to be especially productive in tax scams as well, resulting in numerous IRS notices and warnings both for taxpayers and tax professionals.

As part of the Security Summit effort, the IRS urged tax professionals to review their tax preparation software settings and immediately enact all security measures, especially those settings that require usernames and passwords to access the products. The IRS is aware of approximately two dozen cases where tax professionals have been victimized in recent months.

Thieves are able to access tax professionals’ computers and use remote technology to take control, accessing client data and completing and e-filing tax returns but directing refunds to criminals’ own accounts. Victims in the tax community learned of these thefts while reconciling e-file acknowledgements.


In addition to activating security measures for tax software products, IRS urges all tax preparers to take the following steps:


  • Run a security “deep scan” to search for viruses and malware;
  • Strengthen passwords for both computer access and software access; make sure your password is a minimum of eight digits (more is better) with a mix of numbers, letters and special characters and change them often;

  • Be alert for phishing scams: do not click on links or open attachments from unknown senders;
  • Educate all staff members about the dangers of phishing scams in the form of emails, texts and calls;

  • Review any software that your employees use to remotely access your network and/or your IT support vendor uses to remotely troubleshoot technical problems and support your systems. Remote access software is a potential target for bad actors to gain entry and take control of a machine.



Taxpayers and tax professionals alike are also warned of fake IRS tax bills related to the Affordable Care Act.


The IRS has received numerous reports of scammers sending a fraudulent version of a notice labeled CP2000 for tax year 2015.


This scam may arrive by email, as an attachment, or by mail. It has many signs of being a fake:


  • The CP2000 notices appear to be issued from an Austin, Texas, address;
  • The letter says the issue is related to the Affordable Care Act and requests information regarding 2014 coverage;
  • The payment voucher lists the letter number as 105C;
  • Requests checks made out to I.R.S. and sent to the “Austin Processing Center” at a post office box.



An authentic CP2000 notice is used when income reported from third-party sources such as an employer does not match the income reported on the tax return. Unlike the fake, it provides extensive instructions to taxpayers about what to do if they agree or disagree that additional tax is owed. A real notice requests that checks be made out to “United States Treasury.”

Taxpayers or tax professionals who receive this scam email should forward it to phishing@irs.gov and then delete it from their email account.


Taxpayers and tax professionals generally can do a keyword search on IRS.gov for any notice they receive. Taxpayers who receive a notice or letter can view explanations and images of common correspondence on IRS.gov at Understanding Your IRS Notice or Letter.


IRS impersonation scams take many forms: threatening phone calls, phishing emails and demanding letters. You can find out more at Reporting Phishing and Online Scams. Always remember that the IRS does not initiate unsolicited email contact or contact by social media.


Our advice is to keep in touch with your tax professional whenever you are contacted regarding your taxes, and check our newsletters regularly to keep up with all the news and pertinent information on your taxes and IRS procedures and regulations.
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