IRS Forms Public-Private Committee to Combat Tax Fraud

The IRS announced Friday a new coalition to combat tax scams and address what has already been “millions in revenue loss and risk to taxpayers.”

The Coalition Against Scam and Scheme Threats, or CASST, was conceived by IRS Commissioner Danny Werfel and includes federal and state tax agencies along with 60 different private sector organizations, including software and financial companies and national tax professional associations.

Through CASST, the groups plan to “work to expand outreach and education about emerging scams, develop new approaches to identify potentially fraudulent returns at the point of filing and create infrastructure improvements to protect taxpayers as well as federal, state and industry tax systems.” 

Werfel noted in the announcement a need for the group amid a “rising tide of scams and schemes that try to exploit taxpayers and find gaps in government and industry defenses.”

The collaboration between the groups is intended to include faster sharing of information, quick responses to threats and improved communication with the public.

“Our goal is to have a mass effect on this expanding problem that’s spread on social media and through bad actors,” he said.

According to the announcement, the coalition is an “outgrowth” of the IRS’s Security Summit, which was founded in 2015 and every year reports a “dirty dozen” list of tax scams. The list has, in some years, included abuse of 401(k) and IRA reporting.

Among those who have signed up from the private sector include the Council for Electronic Revenue Communication Advancement, the National Association of Computerized Tax Processors and the American Coalition for Taxpayer Rights.

The IRS noted that, during past tax seasons, there has been an increase in scams focused in particular on the Fuel Tax Credit, household employment taxes and the Sick and Family Leave Credit.

“The IRS has seen hundreds of thousands of dubious claims come in where it appears taxpayers are claiming credits for which they are not eligible, leading to refunds being delayed and the need for taxpayers to show they have legitimate documentation to support these claims,” the regulator wrote. 

The announcement comes one week after the U.S. Department of Justice’s Office of the Inspector General sent a warning to employers that hybrid scams, in which scammers impersonate Social Security Administration employees, are on the rise.