Tax-related scams occur year-round and cost individuals and businesses millions annually. But recent months have seen a surge in some tax scams, according to federal tax officials.

The South Carolina Department of Revenue (SCDOR) wants the public to be aware of these scams and to know what to do if they run across them. Two of the scams the IRS and SCDOR are highlighting this summer are related to tax refunds and the federal Employee Retention Credit.

Phony tax refund scams

• Recently, thousands of taxpayers in South Carolina and other states have received phishing emails promising tax refunds of $976. Others have received emails claiming they are due a refund and will need to create an “E-refund" by clicking a link, noting that the action must be taken within 3 days.
• The goal of these scams is to trick taxpayers into clicking a link, which takes them to a website where identity thieves steal their personal information.
• Last month, the IRS warned of another scam where a letter with the IRS masthead that claims to be “in relation to your unclaimed refund" is delivered in a cardboard envelope by a delivery service.
• Just like a phishing email, this scam asks taxpayers to provide a variety of personal and sensitive information using email addresses and phone numbers that don't belong to the IRS.
  
• Remember – the SCDOR and the IRS do not initiate contact with taxpayers by email, text message, or social media. Do not click on links in emails you were not expecting. The SCDOR and IRS use postal mail, not a delivery service, to send notices to individual taxpayers.
   

Employee Retention Credit scams​

• Businesses in South Carolina and elsewhere also are being targeted by scammers marketing federal Employee Retention Credits (ERC), which were offered during the pandemic to firms that continued to pay employees while their operations were fully or partially suspended.
• These scammers make false claims to businesses about their eligibility for the ERC, leading businesses to improperly claim the credit. The scammers charge up-front fees or fees based upon the amount of claims a business submits.
• The IRS recently announced it was focusing auditors and criminal investigators on these claims and those promoting the scam. It also has warned businesses that improper ERC claims must be repaid, along with penalties and interest.
  
• Visit the IRS's  Employee Retention Credit webpage for details about how to properly claim the credit, and how to report suspected Employee Retention Credit scams.
   
  

What to do if you feel you have been scammed

• For South Carolina assistance:
  

• If you suspect or know of an individual or company that has committed tax fraud, complete the CID-27, Tax Violation Complaint Form and submit it to the address listed on the form.
• If you believe you are a victim of identity theft, file an I-381, Identity Theft Affidavit with the SCDOR and submit it to the address listed on the form.
• File a police report.
• Contact the SC Department of Consumer Affairs.

• For federal assistance:

• To report phishing scams, send the email or a copy of the text message as an attachment to phishing@irs.gov.
• Taxpayers can also report scams to the Treasury Inspector General for Tax Administration or the Internet Crime Complaint Center.
• ​To report Employee Retention Credit scams, submit the Form 14242, Report Suspected Abusive Tax Promotions or Preparers. Mail or fax a completed Form 14242 and any supporting materials to the IRS using the information on the form.
  
  

Stay connected!
Follow the SCDOR on Facebook, Twitter, and YouTube, and subscribe to ReveNews for the latest updates, resources, and reminders.

Visit the SCDOR's Security Center for more resources to help you protect yourself from tax fraud year-round.