Tax Scams Linking to Stimulus Checks and COVID-19 (Copy)

The impacts of the COVID-19 (coronavirus) pandemic have caused economic hardship and uncertainty for millions of Americans. Unfortunately, scammers constantly seek new ways to target those in need. The IRS has therefore warned all Americans to stay alert for a rash of fraudulent calls, emails and text messages associated with the coronavirus.

Many of these scams relate to the Economic Impact Payments (EIPs, or stimulus checks) many Americans are receiving from the IRS during the crisis. The scammers often claim to be able to help people receive their stimulus payments more quickly.

The IRS urges all potential EIP recipients to be especially vigilant for unsolicited calls or messages that supposedly come from the IRS, as well as fraudulent websites and social media posts that ask for money or request your personal information. No one from the IRS will reach out to taxpayers in these ways. Instead, you can always find accurate information at irs.gov.

As a reminder, EIPs are being sent automatically to eligible Americans, including many people like retirees and recipients of VA benefits who are not required to file federal tax returns. In the vast majority of cases, you do not need to take any action to receive your payment. If the IRS has your banking information, the payment will be deposited directly to your account. Otherwise, a check will be mailed to you.

According to IRS investigators, scammers might:

• Ask you to sign over your “stimulus” check to them in exchange for some service. The safest way to handle an EIP check is to deposit it directly to your own bank account.

• Ask you to verify your personal or banking information by phone, email, text message, social media message/post, or through an impostor website. Scammers may claim that giving them this information will speed up the process of receiving your EIP, which is not true.

• Claim that they can get your EIP more quickly for you by representing you, in exchange for a fee or access to your private data. You do NOT need a representative to receive your EIP.

• Mail you a fake check, and then ask you to provide your personal information in order to cash it. Depositing an authentic EIP check will not require such action on your part.

If you have not yet received your EIP and wish to provide direct deposit information to the IRS, you should ONLY do so by using either the official IRS Get My Payment portal (if you filed a 2018 or 2019 federal tax return) or the Non-Filers: Enter Payment Info Here tool. Note that both of these websites have addresses beginning with irs.gov, and your browser should confirm that the site you are visiting is secure (usually by displaying a padlock icon next to the web address).

Under no circumstances should you provide your direct deposit or any other private information to any other website, or to anyone who contacts you in any manner and claims to represent the IRS. If the IRS needs to contact you about your EIP or any other matter, you will receive a letter on official IRS/U.S. Treasury letterhead.

Why Your Stimulus Check Amount May Be Different Than You Expected

Throughout April and May, the IRS delivered well over 100 million Economic Impact Payments (EIPs, also called stimulus payments) to Americans. It was widely publicized that many individual taxpayers would receive EIPs in the amount of $1,200, with an additional payment of $500 per qualifying child. However, the size of each payment depended on a person’s income, family circumstances, and other factors.

If your EIP amount was different than you expected, contact our team to find out why at info@eghucpa.com or (808) 935-3337.

These may be the reasons why your stimulus check may be different than you expected:

• Your adjusted gross income (AGI) may be higher than the limit to receive the maximum EIP amount. For example, single filers with an AGI above $75,000 receive a reduced EIP, with the amount decreasing to $0 for those with AGIs of $99,000 or more. Joint filers with AGIs above $150,000 also receive reduced EIPs, or no EIP if their AGI exceeds $198,000.

• Your 2018 tax return was used because you have not filed your 2019 return, or the IRS has not yet processed your 2019 return. If you have not filed your 2019 federal tax return yet, your EIP amount may have been calculated based on the AGI and family size shown on your 2018 return, which may differ from your 2019 information. Your 2018 return may also have been used if you filed your 2019 return very recently, or the IRS found an issue with your 2019 return that has delayed processing. 

• Your dependents may not qualify for the additional $500-per-child payment. To be eligible for the additional payment, dependent children generally must live with you for more than half the year and be related to you (including by adoption or foster care). Each child must also have been under the age of 17 at the end of the tax year that the IRS used to calculate your EIP (either 2018 or 2019), and have a Social Security Number (SSN) or Adoption Taxpayer Identification Number (ATIN).

• Your payment may have been reduced due to payments you owe, such as past-due child support or other debts. In the event of a reduction due to child support owed, you should receive a notice from the Bureau of the Fiscal Service explaining the reduction. For all other debts, creditors can only gain access to your EIP after it is deposited into your bank account, so your bank records should show the deduction.

If you were entitled to a larger EIP than the one you actually received (for example, if you had a child in 2019 but have not yet filed your 2019 federal tax return), you may be able to claim a credit on your 2020 tax return for any additional amount you are owed.

Unfortunately, because EIPs were sent based on 2018 and 2019 tax returns, many Americans have received checks made out to relatives who are deceased. The IRS has stated that these payments must be returned. The easiest way to return such a payment is to write “VOID” in the endorsement area on the back of the check and mail it to the nearest IRS Service Center (addresses available at irs.gov), with a note explaining why you are returning it.

If your EIP amount was different than you expected, contact our team to find out why at info@eghucpa.com or (808) 935-3337.