IRS warns small business owners about new pandemic-related scam that has netted more than $1 billion

HONOLULU (HawaiiNewsNow) – The Internal Revenue Service is warning of another pandemic-related scam – and this one is targeting small business owners.

Bret Kressin, special agent in charge of the Seattle office with IRS Criminal Investigations, said it’s the latest way to steal money from hardworking taxpayers.

Cressin said the scam involves people pretending to be tax accountants.

Authors of the so-called “ghost” tax advise small businesses to file amended tax returns for 2020, 2021 and 2022 and claim the employee retention credit.

This credit was for employers who paid workers during the COVID-19 shutdown.

Employers can claim up to 70 percent of wages on credit.

“The scammers out there are trying to take advantage of this by telling individuals that they are entitled to this credit,” he said, adding that the thieves get a refund or a portion of it.

An amended tax return can be filed after four years.

Kressin said the Bureau of Criminal Investigation has an active investigation into suspected fraudsters who helped people file amended returns.

Nationwide, the IRS reports, 106 cases have been filed. Some of them are in Hawaii.

The losses are about $1.2 billion in alleged fraudulent loans.

While this particular scam is still going on, ghostwriters have been in trouble for a while.

“There are a number of ways you know they can get you, they can send emails, phishing scams,” said Larry Black, of the AARP Hawaii Fraud Task Force.

Black said these are some of the warning signs that your tax preparer may be fraudulent:

  • He refuses to sign the declaration
  • Refuses to include the preparer’s tax identification number as required by the IRS
  • You will be charged interest on your refund
  • Asks you to sign a blank or incomplete tax form
  • Files the return without permission to review it

Black added that you should be careful if your preparer asks for payment in cash or cryptocurrency.

There are several other scams AARP also warns about

If you think you are a victim of fraud, report to the IRS at once

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