The Child Tax Credit introduced by the Biden administration as part of the American Rescue Plan Act of 2021 is set to take effect in July, and predictably it is already drawing the attention of scammers.
The new act directs the IRS to provide payments of up to $3600 per child for roughly 40 million households. Payments will be issued via direct deposit, paper check or debit cards.
While the tax credit will come as a relief to many families struggling with economic uncertainty in the wake of the Covid-19 pandemic, it also opens the door to a litany of familiar scams. There have already been reports of families receiving scam phone calls requesting financial information to secure monthly payments from scammers claiming a connection with the IRS.
Another method making the rounds: fake or spoofed government websites. The IRS is launching two separate web-based portals for families to apply for the tax credit, one for taxpayers who file yearly tax returns, and another for taxpayers whose income is below the threshold to file returns. Creating two sites doubles the chances of typosquatting being deployed to steal credentials and redirect payments.
Families eligible for the new tax credit should be aware of the potential risks and keep the following tips in mind:
- The IRS does not make unsolicited calls or emails: Official communications from the IRS are sent via standard mail and not conducted through phone calls, email, or text. If you receive an unsolicited phone call from someone claiming to be with the IRS or another government agency, hang up.
- Do not provide sensitive data or personal information without confirming the source: The primary goal of many tax scams is to acquire personal details or compromising information to leverage toward identity theft or to access financial accounts.
- Always double check website URLs and email addresses: Many scams rely on simple typographical errors to deceive targets into providing credentials or sensitive information.
- Report any suspicious activity: If you unexpectedly receive payment or tax credits, report it to the IRS immediately; someone may have filed a false claim in your name.