The IRS recently announced that it will begin sending monthly direct deposit payments in July to those who qualify through the American Rescue Plan Act. This means that those who qualify will get up to half of their child tax credit in monthly installments and the other half when they file their 2021 taxes. Of course, with any new government initiative comes scammers.
When the government makes its way into the news, impostor scams follow close behind. Several variations of this fraud have been discovered already and all are designed to defraud parents and guardians out of their rightful funds. In most versions of the scam, imposters pretend to be an IRS representative offering instructions to “help” the victim receive their funds. However, following the instructions may lead to losing money instead of receiving money.
The IRS has announced that they will have two website portals for families needing to update their information. One portal will be for taxpayers who file annual returns and one for taxpayers with income level below the threshold for filing a return. These two separate sites offer convenience but can also open the door to additional scams. In other versions of the scam, victims may find their way to a fake government website asking them in input personal information in order to receive their funds faster.
Use BBB’s tips to avoid this scam:
- You do not need to take any action or share personal information to receive the Child Tax Credit. If you’ve filed taxes in 2020, or even in 2019, and you’re eligible to receive the CTC funds, they will arrive via paper check, debit card or direct deposit without any action on your part. You only need to update information on one of the IRS portals if you have had a change in income, the number of dependents in your household or you’d like to change your banking information with the IRS.
- Only the IRS will be issuing the Child Tax Credits. Eligibility requirements and payment activity are monitored by the IRS only. Anyone else claiming to “help” you receive the payments is a scammer.
- Avoid impostor scams. Government agencies like the IRS or Social Security Administration will not call, text, DM or email you asking you to share sensitive information. All official communications are sent via standard USPS mail.
- Do not give out personal information. Social security numbers, bank account information or credit/debit card numbers are all personal information that consumers should be skeptical about sharing.
- You will not need to give money to receive money. When someone is requiring payment of “fees” by gift card, wire transfers or cryptocurrency, it is likely a scam.
If you spot a scam, whether you've lost money or not, report it to BBB’s Scam Tracker at BBB.org/ScamTracker and the FTC at ReportFraud.ftc.gov. Your story can help other consumers avoid similar scams.