IRS spotlights charity fraud awareness

Accounting

The Internal Revenue Service is teaming up with international organizations and regulators this week to call attention to the dangers of charity fraud.

The Charity Fraud Awareness Week campaign brings together a group of charities, regulators, law enforcement organizations and nonprofits from around the globe. The goal is to raise awareness of fraud and cybercrime affecting organizations and to create a safe space for charities and their supporters to discuss fraud and share helpful practices.

According to the Fraud Advisory Panel, a U.K.-based organization leading the campaign, cybercrime is on the increase, fueled by the COVID-19 pandemic, with charities, their supporters and beneficiaries finding themselves under attack. The panel estimates the average charitable organization will lose 5% of its revenue to fraud per year. The IRS is partnering in Charity Fraud Awareness Week as part of its ongoing efforts to combat fraud against charities, businesses and individuals.

The IRS headquarters building in Washington, D.C.

Andrew Harrer/Bloomberg

Along with hitting charities with cybercrime, fraudsters are also setting up fake charities, which are again listed among the IRS’s “Dirty Dozen” tax scams for 2021.

“We especially advise taxpayers to be on the lookout for scammers who set up fake organizations to take advantage of the public’s generosity,” said Rob Malone, director of the IRS’s Exempt Organizations and Government Entities division, in a statement Monday. “They take advantage of tragedies and disasters, such as the COVID-19 pandemic. Campaigns like Charity Fraud Awareness Week can help remind everyone to remain vigilant.”

Scams requesting donations for disaster relief efforts are especially common on the phone. Taxpayers should always check out a charity before they donate, and they should not feel pressured to give immediately.

A cornerstone of international Charity Fraud Awareness Week is a social media campaign focused on the theme of “We Can Do This” and featuring the hashtag #StopCharityFraud.

A special website has been created for the campaign and includes information to help partners, charities and other tax-exempt organizations and nonprofits find out more details about Charity Fraud Awareness Week; free resources, a fraud pledge for organizations, and a list of webinars and other events planned for the week.

Those encouraged to participate in the week’s activities include accountants, auditors and those acting as professional advisors to nonprofits; trustees, staff and volunteers from charities, nongovernmental organizations and nonprofits; organizations that represent the interests of nonprofits; and regulators, law enforcement officials and policymakers working to safeguard nonprofits.

For more information about Charity Fraud Awareness Week, visit the Fraud Advisory Panel website. Taxpayers can find legitimate, qualified charities with the Tax Exempt Organization Search tool on IRS.gov.

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