Unfortunately, when the tax season ends and most people stop thinking about tax issues, the tax scammers are just getting started. Their year-round commitment to finding new scams means taxpayers must remain vigilant and well informed.
Here are several tips, taken directly from the most recent tips from the IRS, to help you avoid becoming a victim of these scams:
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Scams use scare tactics. These aggressive and sophisticated scams try to scare people into making a false tax payment that ends up with the criminal. Many phone scams use threats to try to intimidate you so you will pay them your money. They often threaten arrest or deportation, or that they will revoke your license if you don’t pay. They may also leave “urgent” callback requests, sometimes through “robo-calls,” via phone or email. The emails will often contain a fake IRS document with a phone number or an email address for you to reply.
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Scams use caller ID spoofing. Scammers often alter caller ID to make it look like the IRS or another agency is calling. The callers use IRS titles and fake badge numbers to appear legit. They may use online resources to get your name, address and other details about your life to make the call sound official.
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Scams use phishing email and regular mail. Scammers copy official IRS letterhead to use in email or regular mail they send to victims. In another new variation, schemers provide an actual IRS address where they tell the victim to mail a receipt for the payment they make. All in an attempt to make the scheme look official.
As noted by the IRS, some of the scammers will even go so far as giving potential victims directions to a nearby bank where victims can acquire the means to pay the fake IRS agent with a debit card. As this scam has evolved, criminals might also give the victim a legitimate IRS address to mail a receipt for the payment. They go to such lengths to convince the victim the scam is official IRS business.
The con artist’s primary weapon is fear. They use aggressive tactics to provoke an immediate, fearful reaction without slowing down or carefully thinking through the situation.
As noted by the IRS, scams have cost victims over $20 million:
The Treasury Inspector General for Tax Administration, or TIGTA, has received reports of about 600,000 contacts since October 2013. TIGTA is also aware of nearly 4,000 victims who have collectively reported over $20 million in financial losses as a result of tax scams.
“We continue to see these aggressive tax scams across the country,” IRS Commissioner John Koskinen said. “Scam artists specialize in being deceptive and fooling people. The IRS urges taxpayers to be extra cautious and think twice before answering suspicious phone calls, emails or letters.”
Con artists pretending to be IRS agents have traditionally targeted vulnerable groups such as:
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Older Americans
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Recently arrived immigrants
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People who do not speak English as their first language
However, scammers, who are becoming bolder, are now targeting anyone.
The IRS recently published the following “Dirty Dozen” list for 2015, which highlights the most prevalent phone scams that con artists are using:
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Phone Scams: Aggressive and threatening phone calls by criminals impersonating IRS agents remains an ongoing threat to taxpayers.
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Phishing: Taxpayers need to be on guard against fake emails or websites looking to steal personal information.
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Identity Theft: Taxpayers need to watch out for identity theft especially around tax time.
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Return Preparer Fraud: Taxpayers need to be on the lookout for unscrupulous return preparers.
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Offshore Tax Avoidance: The recent string of successful enforcement actions against offshore tax cheats and the financial organizations that help them shows that it’s a bad bet to hide money and income offshore.
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Inflated Refund Claims: Taxpayers need to be on the lookout for anyone promising inflated refunds.
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Fake Charities: Taxpayers should be on guard against groups masquerading as charitable organizations to attract donations from unsuspecting contributors.
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Hiding Income with Fake Documents: Hiding taxable income by filing false Form 1099s or other fake documents is a scam that taxpayers should always avoid and guard against.
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Abusive Tax Shelters: Taxpayers should avoid using abusive tax structures to avoid paying taxes.
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Falsifying Income to Claim Credits: Taxpayers should avoid inventing income to erroneously claim tax credits.
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Excessive Claims for Fuel Tax Credits: Taxpayers need to avoid improper claims for fuel tax credits.
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Frivolous Tax Arguments: Taxpayers should avoid using frivolous tax arguments to avoid paying their taxes.
As it notes in its publications, the actual IRS will never do any of the following practices:
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Call you to demand immediate payment. The IRS will not call you if you owe taxes without first sending you a bill in the mail.
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Demand that you pay taxes and not allow you to question or appeal the amount that you owe.
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Require that you pay your taxes a certain way. For instance, require that you pay with a prepaid debit card.
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Ask for credit or debit card numbers over the phone.
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Threaten to bring in police or other agencies to arrest you for not paying.
If you suspect anything suspicious when someone contacts you claiming to be an IRS agent -- especially if you do not owe taxes or have any reason to think you would warrant contact from the IRS, then the IRS recommends the following actions:
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Do not provide any information to the caller. Hang up immediately.
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Contact the Treasury Inspector General for Tax Administration. Use TIGTA’s “IRS Impersonation Scam Reporting” web page to report the incident.
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You should also report it to the Federal Trade Commission. Use the “FTC Complaint Assistant” on FTC.gov. Please add "IRS Telephone Scam" in the notes.
However, if you do know that you owe taxes or think you might have some tax issue that needs resolution, you can deal with it by calling the IRS at 800-829-1040. The IRS employees will help you if you do have unpaid tax obligations.
Also, always remember that the authentic IRS website is IRS.gov. Never use a website claiming to be the IRS that uses .com, org, .net, or any other address that is not .gov.
And never under any circumstance should you give personal information to a stranger contacting you out of the blue. It’s best to hang up and call the IRS directly yourself using the number above.
Stay up-to-date with the latest scam alerts from the IRS at their page Tax Scams and Consumer Alerts on IRS.gov.
Sources: IR-2015-99, Aug. 6, 2015; IRS Summertime Tax Tip 2015-18, August 12, 2015; IR-2015-26