09 Nov 18 Audra Walter
Tens of thousands of people have lost millions of dollars and sensitive personal information to tax scams. Scammers use the regular mail, telephone, or email to swindle individuals, businesses, payroll and tax professionals.
Americans lose billions of dollars each year to fraud, and more recently, these scammers have moved into the taxpayer’s arena. Fraudsters impersonating IRS officials have become a common problem in the United States causing havoc at the federal level by stealing refunds from unsuspecting victims. These scams may come in the form of a phone call, a letter, or even a personal visit from con artists claiming to be the Internal Revenue Service. If you’re one of the unlucky targets, it’s important to differentiate the real deal from a hoodwinker. In this article, we’ll identify the red flags associated with these types of scams so you can protect yourself, your family, and your business.
The IRS Is Working to Combat Scams
Officials at the IRS are aware that scams like these exist and have put in place measures to make sure that people are not swindled. One of their recommendations involves checking with the IRS.gov website directly, or calling the IRS, which helps you establish whether the person knocking on your door is really from the IRS.
How the IRS Contacts People
The IRS will almost always initiate contact by sending you a letter via the US postal service. There are others times when a Revenue Officer will let you know that they will be coming by and the nature of their visit. However, there are also a few rare instances where they won’t tell you about the impending visit ahead of time. Even if they show up unannounced, you can always ask for identification and call the IRS directly to confirm they are who they say they are.
What are IRS Visits Usually About?
The IRS will visit in regards to the following situations:
- To inform you about their intention to collect back taxes
- As part of a continuing investigation of a criminal offense related to tax in which you are a person of interest
- To carry out routine personal or business audits
How IRS Officials Announce Themselves
If someone comes knocking at your door about tax matters, you’ll need to be sure that whoever is standing in front of you is actually an IRS agent. To that end, they need to show you their HSPD-12 card. This card is issued to people who either work for or are contracted by the federal government.
A Common IRS-Impersonation Telephone Scam
A sophisticated phone scam targeting taxpayers, including recent immigrants, has been making the rounds throughout the country. Callers claim to be IRS employees, using fake names and bogus IRS identification badge numbers. They may know a lot about their targets, and they usually alter the caller ID to make it look like the IRS is calling.
Victims are told they owe money to the IRS and it must be paid promptly through a gift card or wire transfer. Victims may be threatened with arrest, deportation or suspension of a business or driver’s license. In many cases, the caller becomes hostile and insulting. Victims may be told they have a refund due to try to trick them into sharing private information. If the phone isn’t answered, the scammers often leave an “urgent” callback request.
An IRS Employee Will NOT…
- Issue threats. If someone starts threatening you with punishments such as the revocation of business or driving licenses, then your alarm bells should start going off. Trust your better judgment and double check their identification, or contact us directly for help. We can help verify whether someone is a scammer, or an actual agent of the government.
- Make demands that you pay up immediately. Unless they’re asking for a voluntary payment related to a specific period of liability, a Revenue Officer will not ask for payment in full, and they will certainly not ask that payments are made via gift card.
- Ask for payments to be made using a gift cards or cash. Revenue Officers prefer checks written to the “US Department of Treasury” and not to any other entity. They will also encourage taxpayers to pay using “Direct Pay” on IRS.gov. Scammers, on the other hand, routinely ask you to pay via credit, gift cards, or PayPal.
What is the Link Between the IRS and Private Debt Collectors?
From time to time, the IRS will engage private debt collectors to come after any outstanding debts you may have. However, these collectors do not just show up; there must be some kind of prior correspondence between you as the taxpayer and the government. Additionally, they won’t ask you to pay promptly or issue threats. They will NEVER ask you to pay your taxes using gift cards or credit cards.
Educate Yourself on Your Rights as a Citizen and Taxpayer
Always be ready to ask questions and never budge if you think you are being scammed. The real IRS employees will not grow agitated just because you asked for some form of identification or written proof of their intention. They will readily answer all the questions you ask in a bid to make sure that you understand what is going on.
Get an Expert Opinion from a Tax Attorney
To the IRS you’re just a number. At Boxelder Consulting, our team believes that behind every client there is a real person who deserves another chance at a fresh start. If you’re struggling with a past liability or are simply looking for a sound second-opinion, contact our licensed tax professionals today at 303-317-6111. We believe in second chances; start your comeback story today!