June 17, 2020
The IRS issued a press release on June 10 advising people to be careful of new scams surrounding economic impact payments. The United States Attorney's Office for the Eastern District of California and the Internal Revenue Service - Criminal Investigation (IRS-CI) is warning taxpayers to be alert about possible scams relating to COVID-19 economic impact payments.
U.S. Attorney McGregor W. Scott and Kareem Carter, Special Agent in Charge IRS Criminal Investigation, made the announcement in an effort to equip taxpayers to avoid being victimized by criminals who may view the recently approved payments as an opportunity to commit a crime.
"At a time when many Americans are struggling during this national emergency, others are plotting ways to get between the taxpayers in need and the payments that have been designed to help them. I urge everyone to remain vigilant, especially those receiving the COVID-19 economic impact payment, and not fall prey to these scammers," said U.S. Attorney Scott. "It is critical that suspicious calls and efforts are immediately reported to law enforcement."
IRS-CI has already seen scams related to the organized selling of fake at-home test kits, offers to sell fake cures, vaccines, pills and advice on unproven treatments for COVID-19. Other scams purport to sell large quantities of medical supplies through the creation of fake shops, websites, social media accounts and email addresses where the criminal fails to deliver promised supplies after receiving funds.
"As this deadly virus continues to impact every part of our lives, scammers are looking to take advantage of all the chaos," said Special Agent in Charge Carter. "They will prey on our hopes and fears to steal your money, your personal information, or both."
Other COVID-19 related scams involve setting up fake charities soliciting donations for individuals, groups and areas affected by the disease. Some criminals are offering opportunities to invest early in companies working on a vaccine for the disease promising that the “company” will dramatically increase in value as a result. These promotions are often styled as “research reports,” make predictions of a specific “target price,” and relate to microcap stocks, or low-priced stocks issued by the smallest of companies with limited publicly available information.
IRS- CI has also seen 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
Officials with the IRS said these scams are being investigated across the globe since the pandemic is a global health crisis and vulnerable populations everywhere are at risk.
Don't become a victim by allowing criminals to exploit your emotions. Stay strong and tell your family, friends and neighbors about these scams.
Economic Impact Payments – This Debit Card is Not a Scam
The IRS also warns taxpayers not to mistake their stimulus payment for a scam after millions of prepaid debit cards were mailed out last week as part of the $2 trillion CARES Act, which offers a one-time payment of up to $1,200 in federal assistance to some Americans. The Internal Revenue Service won’t charge people who received an economic stimulus payment on a prepaid debit card in the mail and threw it away because they thought the envelope was junk mail. The agency had hoped the prepaid debit cards would be more convenient than paper checks for sending the economic impact payments. Taxpayers can use the so-called EIP Cards to make purchases, get cash from in-network ATMs, and transfer funds to their personal bank account without incurring any fees.
The IRS and the Treasury Department partnered with a private company, MetaBank, to send out the debit cards, MetaBank was already part of an existing debit card program operated by the Treasury. But the debit cards didn’t go out in the usual Treasury Department envelopes that taxpayers who receive their tax refunds through paper checks are accustomed to seeing. Instead the envelope seemed to come from an unfamiliar entity called “Money Network Cardholder Services” and many people apparently tossed it in the trash, thinking it was junk mail, not realizing the contents could be worth thousands of dollars.
The IRS said individuals who have lost or destroyed their EIP Card can request a free replacement through MetaBank’s customer service department. The standard fee of $7.50 will be waived for the first reissuance of any EIP Card. The company has also increased the limit on ACH transfers to a bank account from $1,000 to $2,500 per transaction.
In an entry added last week to the
IRS FAQ page
about the economic stimulus payments, the IRS said any initial reissuance fee charged to a customer from an earlier date will now be reversed. Individuals don’t need to know their card number to ask for a replacement by calling (800) 240-8100 and selecting option 2 from the main menu.
The reason why the envelope says “Money Network Cardholder Services” instead of the Treasury or the IRS or MetaBank is that the EIP Card is sponsored by the Treasury Department’s Bureau of the Fiscal Service and it’s managed by Money Network Financial LLC and issued by Treasury’s financial agent, MetaBank.
The prepaid debit card will arrive in a plain envelope from “Money Network Cardholder Services.” Inside the envelope, the Visa name will appear on the front of the card, while the back of the card has the name of the issuing bank, MetaBank NA. Information included with the card will explain that the card is an EIP card. For more information, visit
EIPcard.com
.
Stay safe,
David Gibbs, CPA, CCIFP, MBA
Partner
McCarthy & Company
Source: IRS.gov and Accounting Today.
Disclaimer: This alert is for informational purposes only and does not constitute professional advice. Information contained in this communication is not intended or written to be used as tax advice, and cannot be used by the recipient to avoid penalties that may be imposed under the Internal Revenue Code. We strongly advise you to seek professional assistance with respect to your specific issue(s).
