Over 60 groups, including the AICPA, have formed a coalition to combat the increasing tax scams and schemes that have intensified during the last tax season, according to a recent IRS news release.
The coalition, called the Coalition Against Scam and Scheme Threats (CASST), was created at the request of IRS Commissioner Danny Werfel. It includes federal and state tax agencies, software and financial companies, and national professional associations.
CASST has chosen three main goals to work on:
1. Increase awareness: Educate the public about new scams as they emerge.
2. Improve fraud detection: Develop new ways to identify fraudulent tax returns at the time of filing.
3. Strengthen systems: Make improvements to protect taxpayers and the tax systems at the federal, state, and industry levels.
AICPA’s Role
Melanie Lauridsen, Vice President of Tax Policy & Advocacy for the AICPA, emphasized the organization’s dedication to protecting taxpayers and tax professionals from identity theft and fraud. She stated, “The AICPA has always worked hard to protect the interests of the profession, taxpayers, and tax administration. We believe that by reducing fraud, we can help safeguard those who are vulnerable to exploitation.”
Types of Scams
CASST is needed because there has been a significant increase in scams and schemes that target taxpayers and try to find weaknesses in government and industry defenses. Commissioner Werfel highlighted that during the past tax season, various scams circulated, including those related to the fuel tax credit, household employment taxes, and sick and family leave credits. Many taxpayers have made dubious claims for credits they were not eligible for, resulting in delayed refunds and the need to provide additional documentation.
Other scams continue to spread on social media, and they are often highlighted in the IRS’s annual “Dirty Dozen” list. The new approach by CASST will focus on raising awareness and education about these schemes throughout the year, not just during tax season.
Coalition’s Future Plans
By the 2025 tax season, the coalition aims to introduce new protections, including efforts to tackle “ghost preparers” – those who prepare tax returns for a fee but do not sign them, leaving taxpayers vulnerable to inflated tax refund claims. CASST will also focus on scammers who exploit weaknesses in government and private sector systems.
Background
CASST is an extension of the Security Summit, which began in 2015 to address the rise of tax-related identity theft. While identity theft remains a concern, the improved protections initiated through the summit have protected millions of taxpayers and prevented billions of dollars in fraudulent payments.