The Internal Revenue Service’s Criminal Investigation Division issued a warning Thursday about a new wave of COVID-19 scams tied to the latest round of stimulus payments, especially targeting taxpayers in the District of Columbia.
The warning comes amid heightened tension in Washington after a riot last week at the Capitol that left five people dead and scores of people injured and led to an unprecedented second impeachment of President Trump on Wednesday. Washington is also bracing for possible protests next week around the time of the inauguration of President-elect Biden. National Guard troops have amassed at the Capitol to protect it.
The new COVID-19 scams echo some of the same schemes seen last year when the previous round of Economic Impact Payments was sent to taxpayers. However, in the last several months, the IRS’s CI unit said it has seen a variety of EIP scams and other financial schemes with the goal of stealing money and personal information from taxpayers. Criminals are taking advantage of the second EIP round, along with the impending tax-filing season, to trick honest taxpayers out of their money.
Mr. Klein is a partner at Kensington Capital Advisors, an independent derivative advisory firm representing borrowers who need advice and counsel related to interest rate, commodity and foreign exchange derivative applications. The practice is national in scope and the Company’s clients operate as non-for-profit (501c3) and municipal organizations, government sponsored entities, tax credit investors, investment banks, and both conventional and non-for-profit real estate developers.Prior to his work at Kensington Capital Advisors, Mr. Klein was a derivative specialist on Bank of America’s derivative trading desk starting in 1995. The client base served by this group encompassed indirect issuers of tax-exempt and taxable municipal debt and public finance professionals, including municipal bond underwriters, financial advisors, municipal reinvestment brokers and bond counsels. The group was responsible for all tax-exempt liability hedging such as swaps for VRDN’s and forward issued municipal bonds. In addition, the group was responsible for all derivative investment products for municipal bond proceeds including forward supply agreements, GIC’s and flexible repurchase agreements for construction funds, reserve funds, debt service funds, escrows, etc.Mr. Klein joined Bank of America (formerly NationsBank) in 1993, after two years with PNC Financial Corporation in the Investment Management and Trust Division. In 1995, Jeff began with the Interest Rate Risk Management Group after working for two years as an analyst in the Bank’s Corporate Finance Department focusing on relationships throughout the southeast and also within industry groups such as Forest Products and Textiles. Mr. Klein’s educational accomplishments include a BS in Business Economics and International Finance from Brown University (1990) and the Danish International School of Business in Copenhagen, Denmark (1988). He has received his series 6, 7 & 63 securities licenses as well as the Chartered Financial Analyst™ (CFA®) designation.
Carl Mazzanti is the founder and CEO of eMazzanti Technologies. His firm specializes in multi-site implementations, outsourced network management, remote monitoring, and support based on Microsoft and related technologies for customers ranging from home office to high-end retail and multinational corporations.
Sean W. Glynn is a partner at Arent Fox LLP and focuses on nonprofit representation. He has significant experience in complex financings, including the securities, corporate, tax and real estate issues that arise in such transactions.
“IRS-CI wants to make sure all residents of the District are aware of the potential scams to help prevent them from becoming victimized,” said Kelly R. Jackson, special agent in charge of IRS-CI's Washington, D.C., Field Office, in a statement. “Please stay vigilant of potential scammers looking to steal your personal information and your money.”
Some of the common COVID-19 scams seen by IRS-CI agents include:
- Text messages asking taxpayers to disclose bank account information under the guise of receiving the $1,200 EIPs;
- Phishing scams using email, letters and social media messages with key words such as “coronavirus,” “COVID-19” and “stimulus” in different ways — these communications are sent to large numbers of people and aim to access personally identifying information and financial account information (including account numbers and passwords);
- The organized and unofficial sale of fake at-home COVID-19 test kits (along with offers to sell fake cures, vaccines, pills and professional medical advice regarding unproven COVID-19 treatments);
- Fake donation requests for individuals, groups and areas heavily affected by COVID-19;
- Bogus opportunities to invest in companies developing COVID-19 vaccines while promising that the “company” will dramatically increase in value as a result.
Taxpayers who get unsolicited emails or social media attempts to gather information that appear to be from either the IRS or an organization closely linked to the IRS should forward the message to phishing@irs.gov. The IRS is encouraging them not to communicate with potential scammers online or over the phone.
