Are You Being Scammed by IRS Impersonators?
Good to Know
Scamming—especially income tax scamming—is on the rise yet again. Even if you’ve already filed your income tax return, you may not be immune from clever and, in one case, particularly loathsome villainy.
The IRS recently published a list of common scams and we’ll focus on three in today’s article, including:
- IRS impersonators,
- Social Security Number fraud, and
- Settling with the IRS for “pennies on the dollar” racket.
IRS Impersonators
The IRS wants you to know three vital aspects of their contacting taxpayers:
- Communication is via U.S. Postal Service letter in virtually all cases,
- They do not send unsolicited emails, and
- They almost never call taxpayers without previous correspondence by letter.
The author characterizes one version of the IRS impersonation as downright evil. Phone scammers are now preying upon the deaf and hearing-impaired using a telecommunication relay service and sign language through a video link.
Other types of IRS impersonation include:
- Calling recent immigrants—unfamiliar with our legal system—and threatening arrest, deportation, revocation of driver’s license, and loss of business license unless the “past due” income tax is paid immediately via gift card or wire transfer,
- On the opposite end of the spectrum, fraudsters tell the taxpayer they’re due a refund but must provide confidential personal information such as a debit card or bank account number to receive the refund,
- Calling English-as-second language taxpayers and speaking in the taxpayer’s native language to lull them into a false sense of security, and
- Claiming to represent the Taxpayer Advocate Service while asking for confidential personal information.
Fraud Prevention Strategy
Do not respond to the call or email. Report the contact using the IRS Impersonation Scam Reporting web page. Alternatively, call 800-366-4484.
Social Security Number Fraud
Scammers use robocalls to threaten the suspension of a taxpayer’s Social Security Number unless the taxpayer calls back immediately. The scammer’s goal is to bully the taxpayer into divulging—you guessed it—their Social Security Number.
Fraud Prevention Strategy
Do not return the robo call, contact the Social Security Administration and report the call to the IRS. The Federal Trade Commission reminds us that your Social Security Number cannot be suspended.
“Pennies-on-the-Dollar” Settlement Racket
The author’s wise grandfather believed that if it’s too good to be true, it might be. In that spirit, the IRS reminds us to “beware of promoters claiming their services are needed to settle with the IRS, that their debts can be settled for ‘pennies-on-the-dollar’ or that there is a limited window of time to resolve tax debts through the Offer in Compromise (OIC) program.” These racketeers can charge thousands of dollars upfront for their “services.”
Fraud Prevention Strategy
Assume the phone call or email is fake and do not respond. Check your eligibility for the program at Offer In Compromise Pre-Qualifier tool. Here’s an intuitive hint— most people will not qualify and even if they do, an OIC mill can do nothing more than an individual can by contacting the IRS directly. Caveat—taxpayers in bankruptcy or similar financial straits may be eligible for an offer in compromise.
The Bottom Line
The IRS asserts they will never:
- “Call to demand immediate payment, especially if the caller demands payment using a specific payment method such as a prepaid debit card, gift card, or wire transfer.
- Threaten to immediately bring in local police or other law-enforcement groups to have the taxpayer arrested [or deported] for not paying.
- Demand that taxes be paid without giving taxpayers the opportunity to question or appeal the amount owed.
- Ask for credit or debit card numbers over the phone [the author would add a bank account, investment account, Social Security, driver’s license, and passport numbers as well].
- Call about an unexpected refund.”
This article includes only the most egregious and common scams. Be sure to click dirty dozen tax scams for a brief summary of more scams.
In closing,
- Be highly suspicious of a call, even if the caller id shows an IRS caller (these IDs can be faked),
- Do not respond to unsolicited emails,
- Never divulge financial or personal information, and
- Verify whether the call or email is valid by contacting the IRS directly through the links and phone numbers in this article.
Disclaimer
The information presented herein is provided purely for educational purposes and to raise awareness of these issues; it is not meant to provide and should not be used to provide legal, identity theft protection, investment, income tax, risk management, retirement, estate, or financial planning advice of any kind. An experienced and credentialed expert should be consulted before making decisions relating to the topics covered herein. There are variations, alternatives, and exceptions to this material that could not be covered within the scope of this blog.
