As tax season progresses in the US, new concerns about phishing scams are emerging as the new Internal Revenue Service (IRS) directive requires mobile payment apps to report commercial transactions totaling more than $600 in one year.
READ MORE: Don’t Forget This New Small Business Tax Rule in 2022
The New IRS Rules and Phishing Scams
Beginning January 1, 2022, third-party payment network providers such as Venmo, PayPal, and Cash App will be required to send users a 1099-K form for transactions made by mail or electronically during the tax year 2022.
Previously, these providers were only required to submit an IRS Form 1099-K for gross payments over $20,000 and more than 200 transactions within a calendar year. It was also left to businesses and individuals to ensure that they report that income on their tax returns.
The move comes in an effort by the IRS to track payments to be reported as income from gig workers, contract workers and small businesses that receive income through electronic forms of payments.
This new threshold change is for payments received for goods and services transactions and does not include payments for family or friends who use PayPal or Venmo for dinners, gifts, and other purchases. If you’re a business owner, it’s a good idea to set up separate third-party checking accounts for your business and personal transactions to better track business transactions.
Why the concern?
While the measure is intended to monitor taxable income, there are concerns about whether taxpayers will be exposed to phishing scams. Under the new tax code, those who receive payments for goods and services provided through online payment services will be asked to provide their tax information such as their social security number or tax number and other private information to allow their payments to be processed.
However, scammers can take advantage of the new requirements by sending fake text messages or emails to unsuspecting companies and individuals to collect personal information and even upload malware to use for future attacks and theft. They can impersonate the IRS or your electronic payment providers to scam you and steal your valuable information.
Last month, a tax phishing scam made headlines targeting tax professionals. The scam involved scammers attempting to steal customer information and taxpayer identities in an attempt to file fraudulent tax returns for refund.
The phishing email used the IRS logo and a variety of subject lines such as “Action Required: Your account is now on hold,” redirecting unsuspecting victims to a bogus website where they are forced to provide their usernames, login credentials, and credit card numbers. .
This post New IRS Rule Will Lead to Widespread Phishing Scams was original published at “https://smallbiztrends.com/2022/03/new-irs-rules-widespread-phishing-scams.html”