The Internal Revenue Service is fending off a barrage of tax refund schemes as crooks using stolen IDs attempt to cash in on 2021 tax breaks that were pumped up during the pandemic.
And the IRS backlog of millions of returns from a year ago could play into their hand to make things just a bit easier for the bad actors.
Many real deal taxpayers can only dream of keeping up with all the new tax rules but clearly the crooks do not face such problems.
Those filing rogue returns know all too well how to generate thousands of dollars in stolen refund cash by claiming the more lucrative earned income tax credit, the child tax credit and the recovery rebate credit, as well as other tax breaks.
Some fraudsters even paid close attention to IRS guidance to use a trick to stick in $0 for last year’s adjusted gross income if they do not have access to an AGI figure from the 2020 tax return.
“The IRS is mostly on to that scheme and looking closer at those tax returns — a LOT closer,” said Mark Steber, chief tax officer at Jackson Hewitt Tax Service.
He noted that the IRS has put out an alert on that shady twist.
There’s much attempted bad activity early in season, Steber said, driven by the large amounts of potential tax benefits.
The IRS has advised legitimate taxpayers who have yet to see their 2020 returns processed to use $0 for their adjusted gross income when they file a 2021 federal income tax return. No need to wait to file this tax season if you have a return…