This is an IRS tax scam warning! The peak of the U.S. tax season is approaching. And with it, comes the tax scammers.
From the Internal Revenue Service:
“Avoid IRS Impersonators. The IRS will not call you with threats of jail or lawsuits. The IRS will not send you an unsolicited email suggesting you have a refund. Nor will they tell you that you need to update your account. The IRS will not request any sensitive information online. These are all scams, and they are persistent. Don’t fall for them. Forward IRS-related scam emails to firstname.lastname@example.org. Report IRS-impersonation telephone calls at www.tigta.gov.”
Tax scams take two forms. The first are the IRS impersonators who either call you or send email. The second form are those scammers who have stolen your identity. And use your identity to file fraudulant tax returns requesting refunds.
IRS Impersonator Tax Scam
This scam goes on year round. Someone will call or email you claiming that they are an IRS representative.
I have received a few of these telephone calls.
The phony IRS representative will make a statement to the effect that you owe the IRS for taxes. And to solve this problem, make payment over the telephone. They follow this with a statement that if you do not pay, you face jail time or a lawsuit.
That is not how the IRS works!
I know. I was a tax practitioner for ten years with my own tax services business. And I was an authorized IRS e-filer.
The IRS never calls! And they will never send a taxpayer an email.
If the IRS wants to contact a taxpayer, they will send a letter or notice. IRS sends millions of letters and notices to taxpayers every year. The notice usually covers a specific issue about your account or tax return. It may request payment of taxes, notify you of a change to your account or ask for more information. They send detailed instructions and include a copy of the Taxpayer Bill of Rights.
Personally, I have received a few letters from the IRS over the years. Things like a mismatched 1099 when a payer did not file my 1099 with the IRS. Also, on another occasion, a corrected W-2 was not filled out correctly by the issuing office (one box was left unchecked).
The Taxpayer Bill of Rights includes the right to challenge the IRS’s position. Plus, the taxpayer has the right to appeal the IRS decision in an independent forum.
Please watch the brief video from the IRS Commissioner.
Even if you owe the IRS money, you have many options. IRS payment Options include:
- Pay by check or money order payable to the U.S. Treasury.
- Pay online through “IRS Direct Pay.” (You will receive an email from the online payment processor company.)
- Pay via same day wire transfer from your bank.
- Pay cash at an authorized IRS retailer.
These payment options all have one thing in common that the scams do not. They are all traceable.
The IRS provides several options for taxpayers who cannot make immediate payment. So the IRS would never threaten a taxpayer with jail or a lawsuit. The options include:
- Submitting a payment agreement requesting installment payments.
- Requesting an offer in compromise to pay less than the full amount owed.
- Requesting a delay in collection due to financial problems.
Please note that by not paying the full tax by the due date, taxpayers will pay interest and penalties.
Tax Identity Theft
Tax-related identity theft occurs when someone uses your stolen Social Security number. The criminal files a tax return claiming a fraudulent refund.
You will not notice this until you e-file and receive a return rejected response. The response indicates a tax return was already submitted with your social security number.
Also, you may receive a notice from the IRS indicating a suspicious tax return. Or that they may be questioning a source of income reported. (Typical taxpayer response: What!? How can that be, I have filed yet.)
Steps to take if you become a victim
If you are an identity theft victim, the Federal Trade Commission recommends these steps:
- File a complaint with the FTC at identitytheft.gov.
- Contact one of the three major credit bureaus to place a ‘fraud alert’ on your credit account:
- Equifax, www.Equifax.com, 1-800-766-0008
- Experian, www.Experian.com, 1-888-397-3742
- TransUnion, www.TransUnion.com, 1-800-680-7289
- Contact your financial institutions to close any accounts opened or used without your permission.
The IRS recommends you take the following steps if you know or suspect you are a victim of tax-related identity theft:
- Respond immediately to any IRS notice. Call the number provided or, if instructed, go to IDVerify.irs.gov.
- Complete the Identity Theft Affidavit if your e-filed return rejects because of a duplicate filing under your SSN. Or if the IRS instructs you to do so. Fill out the form at IRS.gov, print, attach to your return and mail according to instructions.
- Continue to pay your taxes and file your tax return, even if you must do so by paper.
If you contacted the IRS before and did not have a resolution, contact the IRS for specialized help at 1-800-908-4490. They have teams available to assist.