Last month we blogged about a new law that gives the IRS the power to revoke U.S. passports and to contract with private debt collectors. In that post we expressed our concerns about the new private debt collector provision and how it will be implemented, considering the fact that the IRS has an active consumer alert warning taxpayers about IRS-impersonation telephone scams.
As expected, phone scams have made it again to this year’s IRS Dirty Dozen list of tax scams – this time at #2.
The unsolicited phone call
The IRS will never initiate a telephone call. IRS Commissioner John Koskinen has warned taxpayers not to be fooled by people calling and pretending to be from the IRS: “We continue to say if you are surprised to be hearing from us, then you’re not hearing from us.”
Here are examples of two characteristics of phone scams that have cheated around 5,000 taxpayers out of an estimated $26.5 million since October of 2013:
- The bully. CBS recently reported that more than 900,000 people have received threatening calls from scammers pretending to be from the IRS. The scammers try to intimidate taxpayers by threatening to have them arrested for tax fraud unless they pay immediately. Apparently they are so good at this that even lawyers have fallen for it.
- The helper. Following the announcement of a security breach at a company or a government agency, scammers like to call people who may be affected, under the guise of helping out. In their panic, people give them personal information including their birth date, social security number, address and tax-filing status. This effectively puts the scammer in business.
More and more people are overcoming their embarrassment and are speaking up about how they fell prey to these scammers and how to avoid becoming a victim. Note that many of the victims are very intelligent and highly educated, which demonstrates the incredible skill of the callers and sophistication of these rackets. In this day and age, taxpayers must be extremely vigilant about protecting their personal information and report any unsolicited tax-related calls to the Treasury Inspector General for Tax Administration (TIGTA).
On March 14, 2016, the Internal Revenue Service issued the following:
WASHINGTON – Aggressive and threatening phone calls by criminals impersonating IRS agents remain a major threat to taxpayers, but now the IRS is receiving new reports of scammers calling under the guise of verifying tax return information over the phone.
The latest variation being seen in the last few weeks tries to play off the current tax season. Scam artists call saying they have your tax return, and they just need to verify a few details to process your return. The scam tries to get you to give up personal information such as a Social Security number or personal financial information, such as bank numbers or credit cards.
“These schemes continue to adapt and evolve in an attempt to catch people off guard just as they are preparing their tax returns,” said IRS Commissioner John Koskinen. “Don’t be fooled. The IRS won’t be calling you out of the blue asking you to verify your personal tax information or aggressively threatening you to make an immediate payment.”
The IRS reminds taxpayers to guard against all sorts of con games that continually change. The IRS, the states and the tax industry came together in 2015 and launched a public awareness campaign called Taxes. Security. Together. to help educate taxpayers about the need to maintain security online and to recognize and avoid “phishing” and other schemes.
The IRS continues to hear reports of phone scams as well as e-mail phishing schemes across the country.
“These schemes touch people in every part of the country and in every walk of life. It’s a growing list of people who’ve encountered these. I’ve even gotten these calls myself,” Koskinen said.
This January, the Treasury Inspector General for Tax Administration (TIGTA) announced they have received reports of roughly 896,000 phone scam contacts since October 2013 and have become aware of over 5,000 victims who have collectively paid over $26.5 million as a result of the scam. Just this year, the IRS has seen a 400 percent increase in phishing schemes.
Scammers make unsolicited calls claiming to be IRS officials. They demand that the victim pay a bogus tax bill. They con the victim into sending cash, usually through a prepaid debit card or wire transfer. They may also leave “urgent” callback requests through phone “robo-calls,” or via a phishing email. They’ve even begun politely asking taxpayers to verify their identity over the phone.
Many phone scams use threats to intimidate and bully a victim into paying. They may even threaten to arrest, deport or revoke the license of their victim if they don’t get the money.
Scammers often alter caller ID numbers to make it look like the IRS or another agency is calling. The callers use IRS titles and fake badge numbers to appear legitimate. They may use the victim’s name, address and other personal information to make the call sound official.
Here are some things the scammers often do but the IRS will not do. Any one of these five things is a tell-tale sign of a scam.
The IRS will never:
- Call to demand immediate payment over the phone, nor will the agency call about taxes owed without first having mailed you several bills.
- Call or email you to verify your identity by asking for personal and financial information.
- Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
- Require you to use a specific payment method for your taxes, such as a prepaid debit card.
- Ask for credit or debit card numbers over the phone or email.
- Threaten to immediately bring in local police or other law-enforcement groups to have you arrested for not paying.
If you get a phone call from someone claiming to be from the IRS and asking for money or to verify your identity, here’s what you should do:
If you don’t owe taxes, or have no reason to think that you do:
- Do not give out any information. Hang up immediately.
- Contact TIGTA to report the call. Use their “IRS Impersonation Scam Reporting” web page. You can also call 800-366-4484.
- Report it to the Federal Trade Commission. Use the “FTC Complaint Assistant” on FTC.gov. Please add “IRS Telephone Scam” in the notes.
Get professional assistance for defense of tax crimes
If you are in trouble with the IRS, you will be contacted by mail or will be arrested by the authorities. No one from the IRS will call to threaten you with these things. If someone is trying to scam you, hang up and file a report with the TIGTA. If you are the one being accused of scamming, call the experienced criminal tax defense attorneys at Moskowitz, LLP.