IRS Warns of Child Tax Credit Scams

The Criminal Investigation Division of the Internal Revenue Service (IRS) has warned taxpayers regarding the Child Tax Credit-related scams. Through this scam, the criminals are trying to steal both the money and personal information of the United States’ taxpayers.

Through this post, we aim to spread awareness related to the issue and how you, as a taxpayer can save yourself from falling into the trap of criminals. Let’s understand what is this scam and how you can save yourself against it, as explained by the Internal Revenue Service.

What is the Child Tax Credit scam?

The IRS has started rolling out the advanced Child Tax Credit payments from the last week. While millions of American families have started receiving the payments, criminals have started using their innovative techniques as well. Through their tactics, they are trying to take advantage of unwitting victims, stealing their hard-earned money as well as their personal data.

The IRS has warned the families that are eligible for the credit. They have asked the taxpayers to be careful about a variety of text messages, phone calls, emails, and other social media scams targeting them. Any aid offered to you, be it assisting you to sign up for the Child Tax Credit or fast-tracking the monthly payments is a potential scam, warns the IRS.

You must not entertain any unsolicited call or message. Even if you respond to any of them, do not provide your personal information or click on links or open any attached file. Offering any personal information or opening any malicious links may lead to tax-related fraud, money loss, and identity theft.

Corrine Kalve, the acting special agent in charge of the IRS’s Criminal Investigation Division, said that this is the first time Americans are receiving advanced payments of the Child Tax Credit. This historic step is to provide relief to millions of families amidst difficult times. Unfortunately, some greed-driven people are trying to exploit the situation and steal your payments of the Child Tax Credit. She further asked the taxpayers to be careful about the situation and act with caution.

Scott Erik Asphaug, the acting US Attorney for the District of Oregon, said that these payments offer the much-required support to millions of American families. However, some individuals look at these payments as an opportunity to steal money from hardworking parents. They aim to enrich themselves at the cost of honest taxpayers. The acting Attorney added that they are working closely with their partners at the IRS and are committed to taking all the necessary steps to prevent criminals from taking advantage of these families.

How to check if you are eligible for the payments or not?

In order to be eligible for the advance payment of the Child Tax Credit, you and your spouse, if you have filed a joint return, must have:

1. Filed a 2020 or 2019 tax return claiming the Child Tax Credit on the return; or
2. Provided the IRS with the information in 2020 to receive the Economic Impact Payment using the ‘Non-Filers: Enter Payment Info Here’ tool; and
3. A house in the US for more than half the year, including all the 50 states and the district of Columbia or filed a joint return with a spouse who has a home in the US for more than half the year; and
4. An eligible child who is less than 18 years of age at the end of 2021 and who holds a valid SSN; and
5. Made less than the income limits set by the IRS.

If you are a taxpayer who is eligible for the advance payments of the Child Tax Credit, the IRS will use your information from your 2020 or 2019 tax return. This will automatically enroll you for the advance payments. You must note that there are no additional steps that you need to take for enrollment of payments.

However, if you are required to file a tax return or have not yet provided your information to the IRS, you may visit IRS.gov/childtaxcredit2021 to provide your basic information for the Child Tax Credit.

On this page, you will also get a ‘Manage Payments’ tool to manage your Child Tax Credit payments. You can use it for:

• Checking if you are enrolled to receive the advance Child Tax Credit payments
• Unenrolling yourself to stop getting the advance payments
• Providing or updating your bank account details for monthly payments starting with the August payment

You will also get the option to modify or update other information that affects your payment in the coming months.

How to identify a potential fraud call or message?

The criminals constantly come up with fresh ideas and plan to get the maximum advantage of the situation. Although the fraudsters and scammers are leaving no stone unturned to try and catch you off-guard, there are some simple ways to identify if it is really the IRS that is trying to reach out to you. You can recognize that by keeping in mind the following things:

1. The IRS never initiates communication with the taxpayers through an email, a text message, or a social media channel. They do not use any of these communication channels to request the financial or personal information of the taxpayers. Not even the information related to the Child Tax Credit.
2. The IRS never leaves any pre-recorded, urgent, or intimidating message. If you ever get an aggressive call, threatening you about a lawsuit or arrest, you must know that it is fake and that the IRS never does that. You must not respond to any of these intimidating calls or messages.
3. The IRS does not call taxpayers requesting them to provide or verify any financial data so that they can get their monthly Child Tax Credit payments. Hence, if you ever get a call requesting such information on behalf of the IRS, be aware that the IRS does not do that. That may well be a scam call.
4. The IRS never requests payments through a gift card, wire transfer, or cryptocurrency. If you get any such request, do not entertain it.

What to do if you suspect a potential IRS-related scam?

By now, it is clear that the IRS does not communicate with the taxpayers via text messages, emails, or social media channels asking for their personal or financial details. The IRS never requests you to provide passwords, PINs, or other similar access information for banks, or other financial accounts.

Hence, when you get any call, text, or email asking for any of such details on behalf of the IRS, your plan of action should be as follows:

1 For email

When you get an email on the name of the IRS, asking for details, don’t reply to it. Also, do not open any of the attachments. They may contain malicious codes that may infect your phone or laptop. You should also not open any links provided in the email.

However, if you happen to open any provided link and give away any confidential information, visit the identity protection page of the IRS and report the incident.

Moreover, forward the full email to the IRS at [email protected] and delete the original email from your inbox.

2 For call

Some of the most popular scam calls are IRS impersonation, tech support, and sweepstakes, etcetera. It is a good strategy to block these types of calls. Having an easy-to-install call blocking software for your smartphone is an effective way to do it. 

When you get a call from someone claiming to be from the IRS but you have a suspicion that it might be a scam call, then:

• Go through your tax account details and review their payment options at the IRS website to see what is the actual amount you owe.
• If it is a legitimate call from someone at the IRS, consider calling them back via appropriate online resources.

If you find out that the call is not from the IRS, then immediately report the incident to the appropriate law enforcement agency. You must do that irrespective of whether or not you were a victim of the scam call.

You also have various IRS Social Media tools to connect appropriately with the IRS and communicate with them regarding anything. Here, you will get all the latest updates on tax-related modifications, new initiatives, scam alerts, products, and services.

Conclusion

The IRS has started releasing the advance payments of the Child Tax Credit. Through this, the eligible families will receive half the total credit amount in advance monthly payments. The remaining half can be claimed when they file their 2021 tax return. 

While the advance payments of the Child Tax Credit is a historic step by the IRS, it certainly offers an opportunity to the modern-day criminals to try and steal from honest taxpayers. The IRS, like always, is extremely committed to averting any mishappenings with any of the taxpayers. The Child Tax Credit scam warning is another step in the same direction.

The IRS warns all the eligible taxpayers about the potential calls, emails, texts, or social media requests where the IRS impersonator may ask for confidential financial information to steal your identity and money. You need to be careful while responding to any of such requests. Firstly, you must not provide any financial detail to anyone on call or by text. Secondly, you must report any potential scam attempt to the IRS via proper channels. It is extremely important for your safety as well as that of the other taxpayers.