The saying “death and taxes” is incomplete. What it really should be is “death, taxes and scams.” For as long as an organized society exists, so will scams. This tax season has been no different, with many victims falling prey to unscrupulous individuals. Even though the vast majority of us have already filed our taxes for the 2016 tax year, that doesn’t mean the potential for tax scams is over until next season. One of the more prevalent tax scams still occurring is the IRS telephone scam.
How the Scam Works
The scammer will call the victim pretending to be an IRS agent or US government official. The call will often appear very legitimate, with the scammer providing a badge number to the victim, the victim’s caller ID showing the call as originating with the IRS and fake background noises played to make the victim think the spammer is calling from a busy call center.
With the stage set, the scammer tries to scare the victim into sending the scammer money because the victim has an existing tax debt with the IRS. Sometimes the scammer requests payment in an odd way, such as gift cards or money orders.
If the victim challenges the scammer’s claim that an unpaid tax bill is owed, the victim is threatened with arrest, a civil lawsuit, driver’s license revocation, deportation or other arbitrary punishments. In the current political climate, the threat of deportation will be especially effective.
Other ways the IRS telephone scam may appear genuine include:
- A follow-up telephone call from someone claiming to be from law enforcement.
- The scammer will have some basic information about the victim, such as a date of birth or the last four digits of the victim’s social security number.
- The victim may also receive a letter that appears to be from the IRS reminding the victim of an outstanding tax debt.
How the IRS Really Works
The IRS does try to collect its outstanding tax debts, but not in a manner used by most scammers. There are several methods the IRS will use when it attempts to collect an unpaid tax bill:
- The IRS will always provide the taxpayer with an opportunity to dispute the tax amount owed.
- The IRS will accept various methods of payment for a tax bill, not just one or two methods. Additionally, the IRS never asks for payment to be made over the telephone.
- The IRS may assign the tax collection duties to a private company, but there are only four private collection agencies authorized to represent the IRS: CBE Group, ConServe, Performant and Pioneer. Even if a taxpayer’s unpaid tax bill is assigned to a private collection agency, before a phone call is ever made, the IRS and the private collection agency will mail written notices to the taxpayer.
Scams Aren’t Just Limited to the Telephone
Variations of the IRS telephone scam can easily exist in other realms, such as e-mail. Many scammers will try “phishing” or pretending to be an official IRS e-mail or website in order to obtain personal information or money. The IRS may use e-mail to communicate with taxpayers, but it will never use e-mail as a method of first contact about an outstanding tax bill.
What You Can Do if You Think You’ve Been Contacted by a Scammer
If you receive an e-mail or telephone call that you believe was made or sent by a scammer, you should report it to the Federal Trade Commission or the Tax Inspector General for Tax Administration.