The April tax-filing deadlines are well behind us now, but the IRS is warning that tax scammers are not on summer vacation.

Ominous threats from dead-serious scammers seeking to collect on tax-related scams are continuing everywhere according to The Internal Revenue Service.  Everyone should be on alert to these dangers whether filing personal, business, or no tax returns at all.

IRS Commissioner John Koskinen warns that “We continue to urge people to watch out for new and evolving schemes this summer,” and “Many of these are variations of a theme, involving fictitious tax bills and demands to pay by purchasing and transferring information involving a gift card or iTunes card. Taxpayers can avoid these and other tricky financial scams by taking a few minutes to review the tell-tale signs of these schemes” (which are summarized below).

Scammers use regular USPS mail, fax, email and telephone to find victims. This blog looks at just of few of the most popular scams affecting individuals, businesses, and tax professionals and what do if you spot a tax scam.

Pay or Get Arrested Shakedown

Most telephone scams and spams of any type these days have at least a minimal amount of fear about leaving a recorded message not in accord with the “Do Not Call” registry (although the effectiveness and enforcement of DNCR efforts seem dubious).  But not certain IRS scammers.  These efforts involve terse and tough-sounding telephone messages saying that the IRS has been demanding payment for a long time and this is the last chance to avoid an immediate levy on bank accounts, seizure of real-estate, and arrest and prison; payment is required within 24 hours since the IRS has made many fruitless efforts to resolve this matter and that the taxpayer is lying if they claim that they know nothing about this.  Anyone naïve enough to call back will be instructed that there is no time to talk to their tax preparer, attorney or the local IRS office.  A credit/debit card payment of all amounts due or a wire transfer must be made immediately.  Once the funds are sent to the fake-IRS account, little can be done to recover the stolen sums and taxpayer amounts due to the IRS are not eliminated or reduced.

 

IRS Scams Targeting Tax Professionals

Tax professionals are increasingly targeted by scammers looking to file stolen identities directly with the IRS, by impersonating taxpayers and filing fabricated returns and claiming big refunds.   A new phishing email, for example, purports to be from a tax software education firm and asks tax preparers way too much personal information on taxpayers.  And another scam involves hacking into the often poorly secured systems of CPAs and seeks large batches of taxpayer names and other sensitive filing information. This information then enables the scammers to steal client data and file fraudulent tax returns with refunds directed to the accounts of the bad guys, usually overseas.  Adding insult to injury, the IRS then requires on-time filing of CORRECTED business and personal tax returns or incur penalties and interest.

 

Tax professionals are encouraged to catch up on the most popular tax scam approaches by reviewing IRS Publication 4557, “Safeguarding Taxpayer Data, A Guide for Your Business” which provides a checklist to help safeguard taxpayer information and enhance office and IT systems security, and also IRS FS-2017-04, March 2017 “Identity Theft Information for Tax Professionals” (https://www.irs.gov/uac/newsroom/identity-theft-information-for-tax-professionals).

 

 

People with Limited English Proficiency Tax Shakedown

Newcomers to the U.S. have been recent targets of continuing email and phone scams.  IRS impersonators frequently contact their prey in their native language, demand payment of vague and obscure taxes and fees, and threaten the newly-arrived with immediate deportation, arrest and visa revocations.  Victims are told that they owe the IRS amounts that are due immediately and must pay via credit or debit cards, wire transfer or even gift cards. They sometimes also leave a series of urgent callback demand messages through emails or robo-calls.

 

Private Tax Debt Collector Scams

Finally, the IRS recently began contacting some taxpayers with overdue federal tax accounts; these are sometimes assigned to one of four private collection agencies.  Taxpayers should be aware that these matters will only be about a tax debt that the taxpayer has been dealing with for many for years.  If previous communications directly with the IRS were not urgent, then nothing urgent could be involved on first contact by private collection firms.  Taxpayers should be on the lookout for scams involving these private collection firms; the veracity of these contacts and the overall situation can easily be checked by calling the IRS (as described below).

 

Tell-Tale Signs of a Tax Scam

(per ):

The IRS (and its authorized private collection agencies) will never:

  • Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. The IRS does not use these methods for tax payments. The IRS will usually first mail a bill to any taxpayer who owes taxes. All tax payments should only be made payable to the U.S. Treasury and checks should never be made payable to third parties.
  • Threaten to immediately bring in local police or other law-enforcement groups to have the taxpayer arrested for not paying (in fact, local police have basically no interest in IRS enforcements).
  • Demand that taxes be paid without giving the taxpayer the opportunity to question or appeal the amount owed.
  • Ask for credit or debit card numbers over the phone.

 

Also, as soon as you suspect a scam, hang up immediately, do not respond to further emails, and verify the situation with the IRS directly.  Some ways to do this are:

  • Contact the Treasury Inspector General for Tax Administration to report the call, using the IRS Impersonation Scam Reporting web page or call 800-366-4484.
  • Report the suspected scam directly to the Federal Trade Commission. Use the FTC Complaint Assistant at ftc.gov and in the notes area add “IRS Telephone Scam.”
  • View your actual tax account information online at www.IRS.gov including the actual amount you owed and payment options.
  • Call the number on an authentic IRS the billing notice, or call the IRS at 800-829-1040.

 

For more information on not giving up your summer-vacation purse to IRS tax scammers, see also https://www.irs.gov/uac/tax-scams-consumer-alerts