by: Ray Dall’Osto, Jack McNally & Jason Luczak     

In November of 2022, a major cryptocurrency exchange, FTX, failed and has filed for bankruptcy, resulting in billions of dollars of losses for owners of virtual or crypto currency.  Over the past several years, many people in the United States and throughout the world have invested in cryptocurrency. While some have been able to earn profits by trading these currencies, many others have experienced losses. 

Since the cryptocurrency market is mostly unregulated, those who have lost money have had few options for addressing this issue. To make matters worse, scammers are preying on these victims by claiming that they can help recover money that was lost. In reality, people may suffer further losses if they are caught up in these recovery scams, and they may become the victims of fraud.

During the first few months of each year, as April 15th looms, many people are concerned about the requirements for filing their annual federal and state income tax returns. The tax filing process can be stressful, and many taxpayers may be worried about whether they will owe taxes or whether they may face penalties if they provide the wrong information to the Internal Revenue Service (IRS). Unfortunately, this provides scammers with the opportunity to target people and attempt to steal their money or personal information. Those who have been affected by these types of scams can consult with an attorney who understands legal issues related to cybersecurity.

Common Tax-Related Scams

Scammers may use a number of different methods of contacting people, convincing them that they owe money, or asking them to disclose personal information that may be used to commit identity theft. These methods include:

• Unsolicited phone calls - Scammers may call people claiming to be from the IRS and demanding payment for taxes or penalties. These calls can often be threatening, and a scammer may claim that a person will be arrested, their bank accounts seized, their driver’s license will be revoked, or they will face other consequences. It is important to understand that the IRS does not make unsolicited phone calls to taxpayers.  The IRS typically contact people by mail first before using any other methods. The IRS also does not accept payments through gift cards, prepaid credit cards, wire transfers, or cash sent through the mail.

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