With tax season underway, IRS warns of criminal scams

(NEW YORK) — As the tax filing season began Monday, the IRS Criminal Investigation division urged taxpayers to protect themselves from scams.

Some of those scams include questionable refund schemes, return preparer fraud, abusive tax schemes, according to the agency.

“Tax crimes surge during filing season because criminals steal unknowing taxpayers’ information, hack into the servers of CPA firms and tax preparation services and victimize unsuspecting taxpayers with the false promise of huge tax refunds,” CI Chief Jim Lee said in a news release.

IRS Criminal Investigation is the law enforcement arm of the IRS.

In fiscal year 2023, the agency initiated 1,409 tax crime investigations and identified $5.5 billion in tax fraud, IRS Criminal Investigation said. Six hundred fifty-five defendants were sentenced for tax crimes during the last fiscal year.

One recent case involved a father daughter duo who was scamming unknowing immigrants from their Iowa home.

“They victimized hundreds of immigrants and refugees who worked at meat-packing facilities in Iowa by claiming fraudulent tax credits and redirecting their customers’ tax refunds to their own accounts,” the release said.

Thein Maung and his daughter Phyo Mi were sentenced to 12 and nine years in prison, respectively.

In another scam, a man fraudulently filed over 1,700 false tax returns, claiming $9.1 million in refunds, which ultimately resulted in $2.2 million in refunds issued by the Internal Revenue Service. He then transferred the money to prepaid debit cards and checking accounts that he monitored. The investigation revealed that Ayodele Arasokun was tracking more than 700 U.S.-based accounts containing more than $50 million.

Arasokun was sentenced to 34 years in prison.

To avoid getting scammed, the agency says people should not use tax preparers who promise a large refund; use a reputable tax professional who signs and enters a preparer tax identification number (PTIN) on your tax return and provides you with a copy of the return for your records; and never sign a blank tax form.

The IRS also said to “never” click on links or attachments in unsolicited emails or text messages about your tax return or those claiming to be from the IRS.

The emails are fraudulent, include malware and compromise personal information.