Tax Scammers Targeting US Parents

financial criminals hiding in the shadows

April 13, 2024 - With taxes due in just a few days, mid-April can be an extremely stressful time of the year for Americans. As is often the case, scammers are reportedly taking advantage of this in order to steal money from hard-working parents expecting a federal child tax credit.

What Is The Federal Child Tax Credit?

The federal child tax credit is a benefit enacted by the IRS in order to relieve the high cost of raising children. Families with children under 18 can receive a tax credit of up to $2000 per dependent if they earn under $200,000 or $400,000 when filing jointly. There are other factors that may affect this credit, and the scope of this article is not to provide tax advice, so we recommend checking with a tax professional for the most comprehensive details regarding the credit.

How Does The Federal Child Tax Credit Scam Work? 

Because so many Americans depend on the federal child tax credit, scammers have begun targeting parents who may be eligible for the credit in order to steal banking information or personal data from them. In these scams, the criminal will often contact a parent by phone, sms, or email, and claim to represent either the IRS or a tax preperation service. The victim will be directed to provide sensitive information in order to verify their tax credit, and the criminal will then use that information to steal funds from or steal the identity of the victim. In the latter case, the criminal may be able to open lines of credit in the victims name, causing financial repurcussions for years on end.

Protecting Yourself From The Federal Child Tax Credit Scam

In order to protect themselves from this scam, parents are advised to only seek financial advice from trusted financial professionals. Taxpayers can also reach the IRS by phone, but should be mindful that the IRS will never use a phonecall to make contact from their end - US mail only. Do not respond to any request for tax information from unknown sources, including anyone contacting you on the phone. The IRS also maintains a list of active tax-related scams on their website, and a page with advice about phishing schemes.

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