Avoid These IRS and Social Security Scams Related to the Coronavirus Pandemic

Transcript of Podcast Episode 101

Bill – Hello, this is Bill Rainaldi with another edition of Security Mutual’s “SML Planning Minute.” In today’s episode, “Avoid These IRS and Social Security Scams Related to the Coronavirus Pandemic,” an interview with Victor Ngai.

Bill – Today, we’re going to be talking to Victor Ngai , J.D., CLU^®, ChFC^®, RICP^®, who is the Vice President of Advanced Marketing at Security Mutual. Our topic will be a discussion of several of the prevalent scams that are being perpetrated against the public from individuals posing as representatives of the IRS or Social Security Administration, taking advantage of the coronavirus pandemic and preying on the financial concerns of a worried public. Welcome, Victor.

Victor – Thanks, Bill!

Bill – So Vic, let’s get started. We’ve always been inundated with phone and email scams trying to steal personal information and money from unsuspecting people. What’s different now?

Victor – Today, the difference is that the country, in fact the world, has been reeling from the adverse economic effect of the coronavirus pandemic. That has left individuals increasingly vulnerable to scammers. There have been scams related to Social Security benefits and the IRS, among others. Part of the issue has been new rules and regulations and new legislation enacted in 2020 to attempt to alleviate the dire financial situation caused by the pandemic and faced by many individuals and businesses. This has led to great public confusion.

Bill – Okay, so what kind of scams are we seeing impacting Social Security?

Victor – There are actually several, but let’s talk about the two most prevalent. First, members of the public are receiving letters in the mail stating that their Social Security benefits will be cut off because administration offices are closed due to the pandemic. They are then told to call a certain phone number to have benefits continued. Once the call is made, scammers attempt to gain personal and financial information and may even convince individuals to send money in order to continue receiving Social Security benefits.

Bill – That’s terrible, taking advantage of individuals who really need those benefits. What’s the real story?

Victor – While local Social Security offices have been closed during the pandemic, employees have continued to work, and benefits have continued to be paid. The pandemic has had no impact on the payment of Social Security benefits, so any type of threat to suspend or decrease benefits, whether received by mail, text, email or phone call, are fake and should be ignored.

Bill – What’s the second scam involving Social Security?

Victor – The other prevalent scam involves letters or phone calls from individuals purporting to represent the Social Security Administration offering to increase Social Security benefits during the pandemic in return for some type of payment. That’s simply false. The pandemic did not result in any increase in Social Security benefits.

Bill – Where can our clients get more information on these Social Security scams?

Victor – Our clients should check the website for the Social Security Administration’s Office of the Inspector General at oig.ssa.gov/scam. On that website, it states:

• The Social Security Administration will NEVER:
• Call to threaten you with arrest or legal action if you do not immediately pay a debt, fine, or fee.
• Tell you that your Social Security number has been suspended or offer to increase your benefits or resolve identity theft problems in exchange for payment.
• Require payment via retail gift cards, prepaid debit cards, wire transfers, or internet currency like Bitcoin, or by mailing cash.
• Demand secrecy in handling a Social Security-related problem or tell you to make up a story to tell your friends, family, or store/bank employees.
• Text you unsolicited to tell you about a problem with your Social Security number or benefits.
• Email you attached documents containing your personally identifiable information.

Be very cautious if you receive an unsolicited call from the government and you don’t recognize the problem or issue they’re calling about. Do not provide personally identifiable information over the phone.

Bill – let’s switch gears a little and talk about IRS scams. They’ve been around for a long time. What’s new during this pandemic?

Victor – Every year, the IRS issues its “Dirty Dozen” list of tax scams. The complete list for 2020 can be found on the IRS’s website at irs.gov. Search for “Dirty Dozen.” This year several listed scams specifically involve the pandemic and COVID-19.

Bill – What are some of the scams that are trying to take advantage of taxpayers during these trying times?

Victor – There have been several scams where criminals sought to steal personal information and money under the guise of receiving COVID-19 Economic Impact Payments, what most people commonly refer to as the stimulus payments made to most American individuals and families. With the possibility of additional relief payments by the federal government, these scams will continue. Other related scams involve selling fake at-home test kits, selling fake cures, vaccines, pills and advice on unproven treatments for COVID-19.

Phishing remains a popular technique for scam perpetrators. Fake IRS emails and websites that look similar to the IRS website have been used to attempt to steal personal information and financial account information using the stimulus payments as cover for the fake communication.

There have been numerous fake charities set up by criminals to steal money from well-intentioned individuals. Potential donors should do their homework and ensure that charities are legitimate. The IRS, on its website, maintains a database of charities that have been properly registered. Other sources that can be found online, such as the Better Business Bureau Wise Giving Alliance, Charity Navigator, Charity Watch and GuideStar, can help donors to research charities.

Businesses, and their human resources departments and employees, are also increasingly subject to scams, particularly because many businesses have had to shut their physical offices with employees working from home. In particular, there are two scams that have been popular with criminals. The first involves a compromised work email account that is used to send requests to purchase and send gift cards. Related to that are criminals who have access to a victim’s work email, sending emails to human resources to change pay options to direct deposit payments to fake bank accounts. The second scam rising in popularity involves using fake IRS correspondence to lend legitimacy to requests to pay fake invoices.

These are just a few of the scams that the IRS has been warning the public about. As I previously stated, I highly recommend that our clients go to the IRS website and review the list of scams that are commonly used today by criminals so that clients may educate themselves and be vigilant to avoid these scams.

Bill – Are there any general guidelines to determine if a taxpayer is being scammed or is legitimately being contacted by the IRS?

Victor – Yes, there are several guidelines to note.

The first is that the IRS initiates most contacts with taxpayers through regular mail delivered by the U.S. Postal Service. The IRS doesn’t use email or social media to contact taxpayers. On rare occasions, the IRS may visit a home or business, but even those visits are generally preceded by several notice letters sent to the taxpayer via regular mail.

According to the IRS website, the IRS does not:

• Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. Generally, the IRS will first mail a bill to any taxpayer who owes taxes.
• Demand that you pay taxes without the opportunity to question or appeal the amount they say you owe. You should also be advised of your rights as a taxpayer.
• Threaten to bring in local police, immigration officers or other law-enforcement to have you arrested for not paying. The IRS also cannot revoke your driver’s license, business licenses, or immigration status. Threats like these are common tactics scam artists use to trick victims into buying into their schemes.

If a taxpayer truly owes taxes, the payment is always made out to the United States Treasury and not some other organization or person.

Bill – Wow, that’s a lot to think about. It’s a real shame that there are predators looking to take advantage of people during these very trying times.

Victor –  Yes, but we can do our part to avoid becoming victims by using common sense, thinking, checking and double-checking the legitimacy of communications, and checking official government websites for additional information.

Bill – Thank you for joining us today, Victor.

Contact your local Security Mutual Insurance Advisor today to coordinate your financial plans and help you achieve your goals and objectives.

This publication is intended for general information purposes and is believed to be current as of the date of publication. Security Mutual and its agents may not give legal or tax advice. Clients should consult with and rely on their own independent legal and tax advisors regarding their particular set of facts and circumstances. This information is not approved, endorsed or authorized by the Social Security Administration or the IRS.