IRS Fraud and Scams: The Ultimate Guide

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Unfortunately, every year Internal Revenue Service scams are becoming more prevalent. Not only are scam frequencies on the rise, but there is also an increase in the scammers’ sophistication. Currently, there are more than a few methods scammers use. Knowing what they are may just protect you from an otherwise unfortunate experience.

IRS Lawsuit Scam

When you get home from work and find that your answering machine contains unusual messages on your answering machine that the IRS if filing lawsuits against you and that you are officially getting the final notice, this is the IRS Lawsuit Scam. They may even ask you to call them back urgently without leaving a return-number. Soon, you will get another phone call more threatening than the first. Words such as bill collections officers visiting you and collecting paperwork or threats that in twenty-four hours a lien is going to be marked on your bank accounts and assets due to your “inability” to settle accounts past due with the IRS. You may also get a bogus phone number that transfers to a call center where agents ask for your social security number to verify your case file. Never give out your information as this is just another way your information is being “phished” from you. If an agent discusses your case file without first knowing your name, this is an immediate indication that you are being had.

What to do: Use the IRS Impersonation Scam Reporting Form on the IRS website. You can also call 1-800-366-4484 to report a scam to the US Treasury Inspector General for Tax Administration or TIGTA. You can also call the IRS directly at 1-800- 829-1040 to find out whether or not they did get in touch with you.

IRS Mail Scams

This type of scam is harder to identify since it is the most reliable and also the primary correspondence method used by the IRS. Scammers are now aware that initially, the IRS only gets in touch with taxpayers through snail mail. They have most definitely evolved in this aspect. Scammers try and duplicate the notices made by the IRS through mimicking the letter’s layout and copying the official letterhead.

The scam letter usually asks you to “verify” your personal information and then asks for the money. A threat of some kind is also included. Be alert for name misspellings and in the main body of the letter, misspellings of your address. This tells you immediately that it is fake. Remember that some fake letters are faxed to potential victims so make sure you stay alert as well.

Reportedly, the newest mail scam involves fake notices asking you to pay a balance you “owe” in connection with the health coverage Affordable Care Act. Tax payers with no proper coverage for health need to pay penalties and scammers are jumping on this opportunity to sound legit to vulnerable consumers. Fraudulent versions of tax notices CP2000 are being sent out. These are letters informing taxpayers about tax return discrepancies. These are sent both through email and mail. You can spot this scam immediately by knowing that the IRS never uses email.

Furthermore, fake letters appear to be issued from an address in Austin, Texas. The letters claim to be related to the Affordable Care Act. They list the message number as 105C in the payment voucher. The checks they request must then be made out to the IRS and sent to a post office box called Austin Processing Center. There are several pages involved in this type of notice, so this is something you might want to be on the lookout for when you get a letter from the IRS sent to you in the mail.

IRS Email Scams

The Internal Revenue Service will never use email to initiate contact with taxpayers. There has apparently been an increase in malware and phishing incidents the past year, and all this happened through email. These emails are fake and contain links to website imitations that look like the website of the IRS where you are asked to put in personal information such as the Social Security number. This information is then used by an identity thief to file false tax returns under your own account, to generate a tax refund that gets right in their pocket. Malware is sometimes contained in the links and emails. This gives your pc a virus allowing a hacker to gain access to your info.

IRS Phone Call Scams

The IRS will only get in contact with you first through regular mail. In the event you receive a letter or notice in the mail, there are steps you can follow. If you instead get a phone call from someone that claims to be an agent from the IRS without getting a regular mailed letter first, this is a scam. A fake agent who uses a phone scam may do the following:

A phone call may be made to you to demand that you pay a specific amount immediately. They may require that you make an IRS payment without giving you a chance to appeal or question the value. You may be convinced by the phone scammer to use a particular method of payment to pay your tax amount. They may also ask for bank information or debit and credit information over the telephone. You may get a threat to be arrested or that the police will be involved. The phone scammer may ask for alternative payments other than American currency. The caller ID that appears on the phone call may have been altered to look legitimate. The same goes for messages on SMS, as the IRS will never send a text message.

There is a new telephone scam on the horizon, as well. In this new scam callers that pose as a representative of the IRS advise their victims that there were two letters certified and send through the mail to the taxpayer but were undeliverable and returned. The caller then threatens to arrest the possible victim if immediate payment is not made through a prepaid debit card. Also, scammer tells victims that the card purchase is linked to the EFTPS system or the Electronic Federal Tax Payment System. This is simply not true.

To make sure that the victim does not potentially back out, the caller will then warn the taxpayer not to get in touch with the IRS office, attorney or tax preparer until after the payment of taxes is made. This is an immediate red flag. At all times, tax payers need to have the opportunity to get in touch with the IRS office, an attorney or tax preparer to resolve any questions or tax dispute they may have. Also, if you are not sure how much you owe or if you owe taxes, you will have the opportunity always to call the IRS directly and hang up on the person making the demand. You must not every be under any pressure to make a payment spur of the moment.

What the scammer hopes is that you will recognize the EFTPS. This is a real system used by the government for electronically paying your taxes. Through the US Department of Treasury, tax payment through the EFTPS is free of charge. There is no purchase required to make from a debit prepaid car, so don’t get fooled. Plus, the system of the EFTPS is automated. This means that you won’t get an IRS phone call. All the EFTPS happens to be is one of the methods you can pay the amount you owe.

Does any of this sound familiar? Taxpayers have been targeted by scammers for years through the telephone. In traditional scam versions, impersonators of the IRS call and even demand payments on gift cards such as iTunes cards. Remember, just because tax season is over does not mean scammers still won’t attempt to get away with their scam. Bear in mind that the first time you should hear from the IRS will not be through a threatening, random phone call.

What to do: Hang up the moment you suspect it’s a scam. Next, use the IRS Impersonation Scam Reporting Form on the IRS website. You can also call 1-800-366-4484 to report a scam to the US Treasury Inspector General for Tax Administration or TIGTA. You can also call the IRS directly at 1-800- 829-1040 to find out whether or not they did get in touch with you.

IRS Tax Fraud

Tax-related fraud happens when someone uses your Social Security number filing a tax return to claim a fraudulent tax refund. You might not even be aware that this occurred until you file your return and find out that a return has already been filed using your SSN. You might also get a letter sent to you in the mail claiming a suspicious return from you, with your SSN having been used.

This type of tax fraud is something you need to watch out for. Be alert if the IRS gets in touch with you about records indicating you got income or wages from employers you did not work for. If your tax professional says, you owe additional refund offsets and an additional charge for a year that you did not file a return of your taxes. This also applies if someone used your SSN to file for more than one tax return.

What to do: If this is the case, complete form 14039 IRS Identity Theft Affidavit and attach this to your forms and mail according to the instructions on the form.

IRS Social Media Scam

Believe it or not, social media is the newest avenue that scammers are targeting their newest victims. Keep in mind that the IRS will never communicate with you or request anything on a social media platform about personal matters. The social media accounts of the IRS are strictly going to be used for reminders, updates, and the news.

What to do: Call the call the IRS at 1-800- 829-1040 to find out whether or not they did get in touch with you. If they communicated through social media, it is unlikely that this was a scam attempt. You can also call 1-800-366-4484 to report a scam to the US Treasury Inspector General for Tax Administration or TIGTA.

Remember, the IRS will never:

Ask for debit or credit card information over the phone.
Require a specified method of payment is used to pay your taxes, such as a wire transfer, gift card of prepaid debit card.
Demand that you get your taxes paid without giving you the chance to appeal or question the amount you allegedly owe.
Threaten to bring law enforcement groups such as the local police to you immediately to arrest you for non-payment.
Call to demand an over-the phone immediate payment or call about the taxes you owe without a bill having been mailed out to your first. This is true even with the use of debt collecting agents.

The moment you feel suspicious, hang up and call the IRS back at 1-800-829-1040 to make sure they really did get n touch with you. It is always better to be safe than sorry at this point. On the IRS website, there is also a form called IRS Impersonation Scam Reporting you can use to report persons that pretend to be from the IRS. Add IRS Telephone Scam in your notes.