- November 18, 2019
- Posted by: Dane Janas, EA
- Categories: Personal Finance, Personal Tax, Taxes
Although we are well outside of tax season, tax scams continue, and fraudsters remain hard at work. The IRS advises taxpayers to be on the lookout and always vigilant of evolving phishing e-mails and telephone scams.
New Tax Scams in 2019
Social Security Numbers
This tax scam includes scammers claiming to be able to suspend or cancel the victim’s Social Security Number. It is similar to the popular IRS impersonation scam, and is yet another attempt by con artists to frighten people into returning “robo-call” voicemails. Scammers may mention overdue taxes in addition to threatening to cancel the person’s Social Security Number. Sometimes voicemails even involve a real person’s voice, making the victim think that a real IRS agent or employee of the Social Security Administration has been trying to get a hold of them.
Fake Tax Agencies
This new scheme involves the mailing of a letter threatening an IRS lien or levy. The lien or levy is based on bogus delinquent taxes owed to a non-existent agency, usually referred to as the “Bureau of Tax Enforcement”. If you’re reading this article, we’re here to set the record straight: there is no such agency. All tax notices mailed to individuals come from one of four main entities: the Internal Revenue Service (IRS), the Social Security Administration (SSA), your state’s Department of Revenue or Taxation, or a local tax collection agency or tax collector. However, the lien notification also will likely mention the IRS to confuse potential victims into thinking the letter is from a legitimate organization.
Both scams display classic signs of being scams. The IRS and its Security Summit partners (state tax agencies and the tax industry as a whole) remind everyone to stay alert to scams that use the IRS or reference taxes.
Tax Scams that Continue Year After Year
The IRS does not leave pre-recorded, urgent, or threatening messages. In many variations of the classic phone scam, the victims are told that if they do not call back immediately, a warrant will be issued for their arrest. Not only does the IRS not generally issue warrants for arrests, but they will only mail you tax notices.
However, we hesitate to say the old advice of “the IRS will never call you”. While this is true 99% of the time, there may be special circumstances which would exist to allow the IRS to call or come to a home or business address of a taxpayer. These visits include times when a taxpayer may have an overdue tax bill, a delinquent tax return, or the IRS needs to tour a business as part of a civil investigation (such as an audit or collection case), or during criminal investigations.
Other verbal threats on such phone scams include law-enforcement agency intervention, deportation, or revocation of licenses. Criminals can “spoof” caller ID numbers to appear to be anywhere in the country. In this case, they are often “spoofed” to be from your local area code, from the Washington D.C. area code, or from an actual telephone number of an actual IRS office location. Unfortunately, this prevents taxpayers from being able to verify the true telephone number of the caller. Fraudsters have also “spoofed” telephone numbers of local sheriff’s offices and police departments, state departments of motor vehicles, and other federal agencies all to convince the taxpayer that the call is legitimate.
E-mail Phishing Scams
The IRS also does not initiate contact with taxpayers by e-mail. Additionally, they will never request personal or financial information. The IRS actually looks at e-mail as a wholly non-secure system, and refuse to use it even to communicate with tax professionals. The IRS initiates most contact with taxpayers exclusively through the United States Postal Service.
If a taxpayer receives an unsolicited e-mail that appears to be from the IRS or a program closely linked to the IRS, and believes that e-mail to be fraudulent, the IRS urges the taxpayer to report the e-mail by forwarding it to [email protected]. Go to www.irs.gov and search for “Phishing and Online Scams” to read more information.
Telltale Signs of a Tax Scam
The IRS (and its private collection agencies) will never:
- Call to demand immediate payment using a specific payment method such as prepaid debit card, gift card, or wire transfer. The IRS not only does not use these methods for tax payments, but will also first mail a bill to any taxpayer who owes taxes. In fact, in most cases, they will mail a series of bills first. All payments should only ever be made payable to the United States Treasury; checks should never be made payable to third parties.
- Threaten to immediately bring in local police or other law enforcement agencies to have the taxpayer arrested for non-payment of tax.
- Demand that taxes be paid without giving the taxpayer the opportunity to question or appeal the amount owed. There are many processes and procedures in place to allow the taxpayer these opportunities, and the IRS affords these opportunities to all taxpayers.
- Ask for a credit card, debit card, or bank account number over the telephone.
What To Do If You Think You’re Being Scammed
For anyone who does not owe taxes and has no reason to think they do, you should:
- Hang up immediately. Do not give out any information, and do not respond to any prompts. There are even scams that exist that record taxpayers saying the word “yes” to give verbal authorization to legitimate agencies, allowing fraudsters to commit further identity theft. Do not answer any of the caller’s questions. Do not play along with the person on the phone or attempt to keep that person on the line to frustrate them. Scammers call numerous numbers to find that one person out of many that they can scam. Attempting to keep them on the phone simply draws attention to you, and has no effect on their ability to scam or call others.
- Contact the Treasury Inspector General for Tax Administration to report the call. Use their IRS Impersonation Scam Reporting page online here.
- Report the caller ID and/or callback number to the IRS by sending it to [email protected], with the subject of the e-mail as IRS Phone Scam.
- Report it to the Federal Trade Commission. Use the FTC Compliant Assistant at www.ftccomplaintassistant.gov and add the description of IRS Phone Scam in the notes section.
For anyone who does owe tax or thinks they do:
- View tax account information online at www.irs.gov to see the actual amount owed. Taxpayers can also review their payments options online.
- Call the number on the notice received to speak to an IRS agent.
- Call the IRS main individual customer service number at 1-800-829-1040. IRS workers can assist.
- Contact a tax professional – like Boundless Tax! Chat with a tax pro here or call us at 610-628-9152. We respond can speak with the IRS on your behalf and can respond to notices for you.
Additional Tax Scam Notes
The IRS does not use text messages or social media to discuss personal tax issues, for obvious reasons. For more information on tax-related scams, visit the Tax Scams and Consumer Alerts page on www.irs.gov. Additional information on tax scams is also available on IRS social media sites, such as YouTube.