Accounting firms are starting to see an increase in scams involving the CP53E notices that the Internal Revenue Service has been sending to taxpayers this year when they don't provide their direct deposit information.
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In recent days, at least two firms — Grassi and CBIZ — have emailed warnings to their clients about the notices either being sent in error or being fraudulent. As of March, the IRS had reportedly sent out over 1.4 million of the notices, according to Democrats on the tax-writing House Ways and Means Committee who had written letters to the IRS to ask about the notices and the resulting tax refund delays. The notices were the result of an effort by the Trump administration to phase out the use of paper tax refund checks and urging taxpayers to provide direct deposit information on their tax returns. While the IRS is continuing to send out refund checks, it is also sending out the CP53E notices asking taxpayers to provide bank account information asking taxpayers to provide bank account information to expedite processing.
Fraudsters have apparently taken notice and are also sending out fake notices.
Grassi warned in an alert Monday that a CP53E notice may not be legitimate if it includes a QR code or clickable link directing taxpayers to "verify," "activate," or "unfreeze" a refund. "Even if a legitimate notice does reference IRS.gov, it is safest to type the website into your browser instead of scanning a code or clicking a link," the firm advised.
Other scam messages ask for a taxpayer's bank account information by phone, text or email. Grassi noted that the IRS says taxpayers can only update their bank account information only through their online individual account, and IRS employees can't make that change by phone. Some of the fake notices include urgent or threatening language demanding immediate action from taxpayers. Brian McCuller and Joseph Carnevale of Grassi pointed out that the IRS provides a 30-day response window on a legitimate CP53E, while a fake notice may be "forward dated" to heighten the "perception of urgency."
CBIZ also issued an advisory to clients last week noting that many legitimate notices may have been sent in error by the IRS.
"Several clients have recently reported receiving IRS Notice CP53E despite not being due a refund," wrote Rayle Hernadex, a senior tax associate at CBIZ. "Although the inquiries may relate to legitimate IRS inquiries, it appears that many of these notices may have been issued in error. Nonetheless, taxpayers should remain vigilant."
She cautioned taxpayers not to update their banking information immediately and avoid using the QR code on the notice. Instead, they should access their online account on IRS.gov directly from their browser.
