Tax Tips Logo ImageISSUE:

On November 4, 2020, the Security Summit warned of a new text scam created by thieves that trick people into disclosing bank account information under the guise of receiving the $1,200 Economic Impact Payment.

 

 

SITUATION:

Marathon Bible College (MBC) is a private college exempt under Internal Revenue Code section 501(c)(3) and 170(b)(1)(A)(ii).  They are required to file Form 990 annually.

MBC’s Controller called us to ask about some suspicious emails that their students had been receiving lately.  “Is there a second round of $1,200 Economic Impact Payments going out?”

“No,” we reply.  “Although there has been talk in the press for months, there is not a second round of these payments currently.  However, some people have still not claimed/received their original $1,200 payments.  Why do you ask?”

“Well, some of our students are getting odd emails that tell them, ‘You have received a direct deposit of $1,200 from COVID-19 TREAS FUND. Further action is required to accept this payment into your account.’ and to click a button to continue.  We’ve done a lot of cybersecurity training, so our students knew not to click the button and to report these emails to our Cybersecurity Point Person.”

“It is good that they did.  This is a widespread ‘phishing’ scam that the IRS announced last week.  As we’ve said before, the IRS is working with the Security Summit to provide guidance on phishing scams and other criminal attempts to compromise systems of tax preparers, educational institutions, and other organizations.  Every institution needs to do a cybersecurity assessment and provide basic training – then continuous training and updates on threats like this.”

 

RULES:                                                                        .

From IRS News Release 2020-249:

“Criminals are relentlessly using COVID-19 and Economic Impact Payments as cover to try to trick taxpayers out of their money or identities,” said IRS Commissioner Chuck Rettig. “This scam is a new twist on those we’ve been seeing much of this year. We urge people to remain alert to these types of scams.”

The scam text message states: “You have received a direct deposit of $1,200 from COVID-19 TREAS FUND. Further action is required to accept this payment into your account. Continue here to accept this payment …” The text includes a link to a fake phishing web address.

This fake phishing URL, which appears to come from a state agency or relief organization, takes recipients to a fraudulent website that impersonates the IRS.gov Get My Payment website. Individuals who visit the fraudulent website and then enter their personal and financial account information will have their information collected by these scammers.

People who receive this text scam should take a screen shot of the text message that they received and then include the screenshot in an email to phishing@irs.gov with the following information:

  • Date/Time/Time zone that they received the text message
  • The number that appeared on their Caller ID
  • The number that received the text message

The IRS does not send unsolicited texts or emails. The IRS does not call people with threats of jail or lawsuits, nor does it demand tax payments on gift cards.

People who believe they are eligible for the Economic Impact Payment should go directly to IRS.gov.

People who do not have a filing requirement but who are eligible for EIP can use a non-filers tool on IRS.gov until Nov. 21 to claim their payment.

 

BOTTOM LINE:

  • The Security Summit has some great guidelines to help with Cybersecurity and threats to your systems.
  • A new “phishing” scam is out there.  You should alert your students about this “Economic Impact Payment” ruse.
  • Every institution should conduct a Cybersecurity assessment to identify threats to your system and document the safeguards you put in place to ensure against those threats.
  • Safeguards may include anti-virus software, backups, system checks, and – especially – training of your faculty, students, and staff.

Specific questions? Email Dave Moja

The information provided herein presents general information and should not be relied on as accounting, tax, or legal advice when analyzing and resolving a specific tax issue. If you have specific questions regarding a particular fact situation, please consult with competent accounting, tax, and/or legal counsel about the facts and laws that apply.

© 2020 Moja & Company, LLC