Help for IRS and tax scams
Have you received a call lately from the IRS threatening legal action? Many have, and the calls sound scary, an official-sounding robotic voice tells you to take action now, or the IRS will be forced to take legal action.
It is all very concerning, and it is all very fake.
There are many tax scams out there. The purpose of these scams is to steal your identity, steal your money or file fraudulent returns using your private information. They file a fake return to claim a phony refund and leave you figuring out the mess.
Tax scammers work year-round, not just during tax season, and they target everyone.
The best thing to remember to protect yourself is that the IRS will never initiate contact with you via telephone, text message, email, or social media to request personal or financial information.
The IRS will always first send a letter requesting information.
In this post, we go through some of the scams and explain what you need to do to protect yourself.
The IRS-impersonation telephone scam
Short version: what to do if the IRS calls? Hang up. Unless you scheduled an appointment with them or are expecting calls, this is fraudulent.
The IRS-Impersonation telephone scam is an aggressive and sophisticated telephone scam that targets taxpayers, especially recent immigrants. It has been going on for a couple of years now and has impacted every corner of the country.
The callers claim to be employees of the IRS but are not. They even use fake names and bogus IRS badge numbers. They can be very convincing and know a lot about you from information gathered online. They will even alter the caller ID to make it look like the IRS is calling.
If you don’t answer, they will often leave an urgent callback request and make legal threats.
If you talk to them, they will often tell you that you owe money to the IRS, which you must pay promptly through a pre-loaded debit card, gift card, or wire transfer. They require these forms of payment because once the payment is made, the payor has no recourse.
If you refuse to cooperate, the scammer will threaten you with arrest, deportation, suspension of a business, or even revocation of your driver’s license. The more you refuse, the more aggressive the scammer will become.
Another scam is for the caller to tell you that you have a refund due or that the government wants to pay you money. The objective, in this case, is to gather personal information to steal your identity in other ways.
What to remember
The first thing to keep in mind is that these callers can be VERY convincing. They are practiced, scripted, and they know how to worm their way into the part of your brain that wants to get the problem solved.
So remember, the IRS will never:
- Call to demand immediate payment.
- Call about taxes owed without first mailing you a bill.
- Demand that you pay taxes without allowing you to question or appeal their decision or the amounts they claim you owe.
- Require you to use a specific payment method for your taxes – the IRS does not require payment via pre-paid debit cards.
- Ask you for credit card, debit card, or Personal Identification Numbers (PINs) over the phone.
- Threaten to bring in local police or other law enforcement groups to have you arrested.
So if you start to hear ANY of these claims, you are talking to a scammer.
What to do if “the IRS” calls
First and foremost, hang up. The fact that they call is NOT an obligation to talk to them. You can end the conversation right there.
Other steps you can take:
- Do not provide any information to the caller.
- If you know you owe tax or think you might owe tax, you should call the IRS at 1-800-829-1040 to get help with a payment issue.
- Report the incident to the Treasury Inspector General for Tax Administration at 1-800-366-4484 or www.tigta.gov.
- Contact the Federal Trade Commission through their fraud reporting site here, be sure to add “IRS telephone scam” to the comments.
Phony IRS Emails – “Phishing”
The other big channel for IRS scams is, unsurprisingly, email. These can take many different forms, but the goal is the same: to get personal information from you that they can use to steal your identity, your money, or both.
The emails can look very official and generally direct the recipient to a website that asks for personal and financial information such as your social security number, bank account, or credit card numbers. These types of scams are “phishing” scams.
Keep in mind that the IRS will not notify you of refunds or payments via email. Nor will they require that you fill out a particular form to receive payment. The IRS always bases refunds on information contained on the federal income tax return that you file.
The IRS never asks for PINs, passwords, or similar secret access information for credit cards, bank accounts, or financial accounts.
What to do when you receive an email from the IRS
If you receive an email from someone claiming to be from the IRS and asking for money, take the following steps:
- Do not reply to the message.
- Do not ever give out your personal or financial information via email.
- Do not open any attachments or click on any of the links – emails themselves are not dangerous, but the attachments can contain malicious software or viruses.
- Forward the email to the IRS at email@example.com.
- Delete the email.
Other scams: It isn’t always the IRS.
Other scams that we have seen include:
These scammers pretend to contact you on behalf of a charity, very often law enforcement-related. Be very suspicious of any charity calling you to ask for money. If you do want to donate, don’t do it over the phone or on that call. Be sure to research the organization and make the call yourself. A few minutes here can ensure your money goes to the right place.
Abusive tax shelters
Callers, emailers, or salespeople may try to sell you illegal tax shelters. If a shelter seems too good to be true, it probably is. Many taxpayers have been caught up in these scams only to find themselves owing significant amounts of back taxes and penalties. If you want advice on paying the right amount of taxes, we are here to help. We can also help you determine whether the shelter you are looking at is a legitimate shelter or a scam.
Frivolous tax arguments
Some less than honest tax preparers will encourage taxpayers to make frivolous legal arguments to avoid paying taxes. The IRS has a whole website dedicated to these frivolous arguments, which you can find here.
These arguments are all wrong and have been thrown out in court, and you can face some significant penalties for using frivolous arguments to avoid taxes.
General strategies to protect yourself from scams
These scams only scratch the surface of the phishing and phone scams that are out there. So here are some general steps to take to protect yourself:
Never share personal information over the phone, through the mail, or over the internet unless you initiate the contact or are confident you are dealing with the right person or entity. You can always call somebody back or time the URL into your browser to ensure you are in the right place.
- Do not carry your Social Security Card or Individual Taxpayer Identification Number – keep these securely stored at home.
- Be very careful when you give your SSN or ITIN to a business: do not give it because they ask. Provide it only if truly required (such as filling in a w9 so that they can pay you).
- Protect your financial information, and do not give it out over the phone or via email.
- Check your credit report annually.
- Protect personal computers with firewalls and anti-spam software.
- Keep your computer up to date by installing the latest patches and security software.
- Use complex passwords and never reuse a password.
- Report instances of tax scams to the IRS. This may seem like a waste of time, but the more people do this, the more the IRS can fight these scams.
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