Most of the more prevalent IRS scams fall into one of three categories including:
- IRS-Impersonation Telephone Scams – victims are told they owe money to the IRS and it must be paid promptly through a gift card or wire transfer. Scammers often have a lot of information on their targets, and can even alter the caller ID to make it look like the IRS is calling. A variation of this scam is scammers claiming that they are also able to suspend or cancel the victim’s SSN; another involves criminals faking calls from the Taxpayer Advocate Service.
- Promoting settlements with the IRS for “pennies-on-the-dollar” – the IRS’s “offer-in-comprise” (OIC) program is offered through the IRS itself and companies advertising on TV or radio frequently can’t do anything for taxpayers that they can’t do for themselves by contacting the IRS directly. Taxpayers can go to IRS.gov to see if they qualify for an OIC.
- Various Email / Phishing Scams – various email scams have emerged targeting educational institutions as well as taxpayers to divulge personal information. Remember that the IRS does not send unsolicited emails to taxpayers – it primarily utilizes the US Postal Service as a first means of contact with taxpayers. One variation on this type of scam includes a recent surge in fraudulent emails impersonating the IRS and using tax transcripts as bait to entice users to open documents containing malware.
Tips to avoid and identify these scams include:
- Always be suspicious. Phishing emails try to freak you out with warnings of stolen information or worse, and then offer an easy fix if you just "click here." (Or the opposite: "You've won a prize! Click here to claim it!") When in doubt, don't click. Instead, open your browser, go to the company's website, then sign-in normally to see if there are any signs of strange activity. If you're concerned, change your password.
- Check for bad spelling and grammar. Most of the scams that come from outside the US are riddled with spelling mistakes and bad grammar. Big companies hire professionals to make sure their emails contain perfect prose. If you're looking at one that doesn't, it's almost certainly a fake.
- Make sure your web browser and antivirus software is up to date. An accidental click of a phishing link doesn't have to spell disaster. McAfee SiteAdvisor and Web of Trust are free browser add-ons that will warn you if the site you're about to visit is suspected of malicious activity. They're like traffic cops that stop you before you turn down a dangerous street.
- Most of all, rely on common sense. You can't win a contest you didn't enter. Your bank won't contact you using an email address you never registered. Microsoft did not "remotely detect a virus on your PC." Know the warning signs, think before you click, and never, ever give out your password or financial information unless you're properly signed into your account.
Remember to stay vigilant and always safeguard your personal information. The IRS does not:
- Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. Generally, the IRS will first mail a bill to any taxpayer who owes taxes.
- Demand that you pay taxes without the opportunity to question or appeal the amount they say you owe. You should also be advised of your rights as a taxpayer.
- Threaten to bring in local police, immigration officers or other law-enforcement to have you arrested for not paying. The IRS also cannot revoke your driver’s license, business licenses, or immigration status. Threats like these are common tactics scam artists use to trick victims into buying into their schemes.
- Ask for credit or debit card numbers over the phone.
- Use email, text messages or social media to discuss personal tax issues, such as those involving bills or refunds.
If you get a suspicious call from someone claiming to be from the IRS and asking for money, you should:
- Do not give out any information. Hang-up immediately.
- Check any telephone numbers left by scammers by searching the web. Some of the phone numbers may be published online and linked to criminal activity.
- Contact TIGTA to report the call. Use the “FTC Complaint Assistant” on FTC.gov. Please add “IRS Telephone Scam” in the notes.
Additional resources can be found at: https://www.irs.gov/newsroom/tax-scams-consumer-alerts
As always, contact your tax professional at Mason + Rich for more information or assistance with any tax-related notices you might receive.