The phone scam run by IRS impersonators is again at the top of the list of the “Dirty Dozen” tax scams issued by the IRS each year. While this IRS impersonator scam has many variations, the general format is that scammers make unsolicited calls to taxpayers claiming to be IRS officials. The purpose of the call is to force the victim to immediately pay a tax bill, often through a pre-paid debit card or a wire transfer. This aggressive phone scam will threaten taxpayers with police action, deportation, and license revocation, among other consequences of not taking quick action to pay this “debt”. According to IRS Commissioner John Koskinen, “We continue to say if you are surprised to be hearing from us, then you’re not hearing from us.” Be warned that this scam has grown in sophistication, and may include an altered Caller ID that makes it appear that the call is really from the IRS. The caller will also provide you with a fake badge number and job title in order to sound more official. And they will likely have your full name, address and other personal information. This IRS impersonator scam may also include phone messages or phishing emails that create an extreme sense of urgency and a demand for you to call back or provide personal information online.
Here Are 5 Tell-tale Signs That You Are Being Targeted by an IRS Impersonator Scam
- The IRS will never…call you on the phone with a demand for immediate payment. If you do have a tax bill, it will first be mailed to you.
- The IRS will never…demand payment for a tax debt without providing you with the opportunity to questions or appeal the amount.
- The IRS will never…ask for debit or credit card numbers over the phone. Nor will they demand a specific payment method, such as a pre-paid debit card or a wire transfer.
- The IRS will never…threaten to involve the authorities or have you arrested for not paying a tax debt.
What To Do if You Become the Target of an IRS Impersonator Scam
If you don’t owe taxes (or don’t believe that you owe taxes) and you receive a call claiming to be an IRS official, hang up immediately. Do not give out any information. The IRS is also requesting that anyone who is targeted by this IRS impersonator scam report it online at the TIGTA dedicated webpage, or by calling 800-366-4484. You can also report it to the FTC here. If you do owe or think you may owe, hang up and call the IRS directly at 800-829-1040 for assistance. It is also requested that you report the call following the directions above. The IRS maintains a Taxpayer Bill of Rights – if you have questions, review your rights and the IRS’ obligation to protect them.
Other Tax Scams to Beware of This Tax Season
Tax scams unfortunately come in all shapes and sizes. Some – like the IRS impersonator scam or identify theft scams – prey on victims, while others attempt to persuade taxpayers to knowingly defraud the federal government. Here is the list of the other common tax scams that have been identified by the IRS as the “Dirty Dozen.” Phishing fake emails or websites that are looking to steal your personal information. Don’t click on a link claiming to be from the IRS. If you have questions about your tax bill, contact the IRS directly after verifying the source.
Identity Theft – the IRS continues to aggressively pursue criminals that file fraudulent returns using someone else’s SSN, but it remains a major scam. Taxpayers are urged to do everything you can to protect your personal information by being suspicious of strange emails, websites or phone calls and only using secure online tax preparation sites or trusted tax preparers.
Return Preparer Fraud – About 60% of taxpayers use tax professionals to prepare and file their returns. And while most are honest professionals doing high quality work on behalf of their clients, there are always dishonest preparers that prey on taxpayers each year. Be especially wary of any tax preparer who is promising an inflated refund or encouraging you to alter your income or hide amounts in order to avoid paying your tax obligation.
Offshore Tax Avoidance – While it’s not illegal to have off-shore accounts, it is illegal to set up off-shore accounts for the purpose of avoiding your tax obligation. Be sure to report all off-shore accounts.
Inflated Refund Claims – If it sounds too good to be true, it is! Scammers will promise inflated returns or even promise a large return without even looking at your records. They may charge a fee based on a percentage of the promised refund. Don’t fall victim to these inflated claims by scammers who operate out of phony storefronts and advertise promises of guaranteed returns.
Fake Charities – Taxpayers are encouraged to carefully research any non—profits before making a contribution. Fake charities will often masquerade as legitimate by using a name that is closely related to a similar nationally-known organization. If you choose to donate online, always remain in control of where you land on the internet and carefully verify the source.
Hiding Income with Fake Documents – the suggestion that you should hide taxable income by filing false 1099’s or other fake documents should always be a red flag. Remember that you are legally responsible for what is filed regardless of who prepared the returns.
“Free Money” From the IRS – there is just no such thing. Don’t be lured in with the promise of refunds or rebates that don’t exist. Never falsify your income in order to claim such refunds. Tax, penalty and interest due as a result of a mistake by a taxpayer are payable by the taxpayer, not the tax preparer or scammer that convinced you to file a return with a fictitious claim.
Frivolous Arguments – tax scammers and tax evaders alike will cite every imaginable reason for why you don’t have to fulfill your tax obligation – many of which are outrageous and outlandish. Be warned that if you claim what the IRS considers to be a frivolous position (as determined by the IRS and the courts), the result could be substantial files and penalties, or even criminal prosecution. As a taxpayer you have the right to contest tax liabilities in court, but you do not have the right to disobey the law or avoid your tax responsibility through frivolous arguments.
Excessive Claims for Fuel Tax Credits – This credit is intended primarily for off-highway business use, such as farming. As such, it is generally not available to the majority of taxpayers. Do not be enticed by a scammer or tax preparer to claim this credit if it is not applicable to you. It may inflate your refunds, but if discovered, you will be responsible for any back taxes, penalties or fines associated with this fraudulent filing.
Falsely Claiming Zero Wages – beware of a known scam that involves filing a fake Form 4852 (Substitute Form W-2) or a corrected Form 1099. Scammers have convinced taxpayers that by doing so, they can reduce their taxable income to zero. However, this scam has been identified by the IRS and filing a return this way can result in a $5,000 penalty, in addition to actual taxes owed.
If you have questions about how to find a trustworthy, qualified tax preparer, use the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualification. For other tips on choosing a preparer or other questions on this topic, visit www.irs.gov/chooseataxpro.