Banking & Finance, Government, and Law

Phone scams top the IRS 'Dirty Dozen'

February 29, 2016
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Each year, the IRS releases a list of top tax scams and identity thefts called the “Dirty Dozen.” The No. 1 scam identified by the IRS for 2016 is phone scams.

In these cases, impersonating “IRS agents” contact taxpayers threatening police arrest, deportation, license revocation and other serious penalties.

Since October 2013, more than 5,000 victims have paid a combined $26.5 million as a result of tax scams. As filing season moves forward it is important to recognize the signs of a scam. Scams come in all different ways. Some victims receive threatening calls with the demand of immediate and direct payment. Other victims are promised large refunds in exchange for personal information.

Common ways these scammers contact taxpayers is via “urgent” IRS requests through “robo-calls” or via phishing emails that lure taxpayers in with promising rewards. For example, one of our clients recently received an automated voicemail message “from the IRS.” The message stated that the IRS was filing a lawsuit against the client and directed them to call an unfamiliar-looking number immediately. Fortunately, our client was smart enough to not take the bait!

Often, scammers will alter caller ID to match actual IRS numbers, or present a fake badge number over the phone to appear legitimate. Furthermore, scammers often use victim’s names, addresses and other private information in an attempt to convince the victim that they are representing the IRS.

How you can tell

Always remember that banks, the IRS and tax software companies will never contact you with sensitive information via unsecure methods such as phone and email. It’s also important to note that if you aren’t expecting to hear from the IRS it probably isn’t them.

More tips regarding phone scams:

  • The IRS will never call and demand direct payments. If you owe money to the IRS, there is a systematic approach that they must follow based on the law. First, the IRS sends a bill to the taxpayer directly through the mail. If you receive a call without first having received a bill, it’s likely a scam.
  • The IRS will never demand you pay taxes without providing you with a chance to appeal or question the amount at hand.
  • The IRS will never require you to use a specific method of payment for any amount due, such as a prepaid debit card. This is another sure sign of a scam as the IRS does not have specific payment requirements.
  • The IRS will never ask for sensitive information over the phone such as credit card or debit card numbers.
  • The IRS will also never threaten to send authorities to arrest you for not paying.

What to do

If you do not owe taxes or have no reason to believe that you do, hang up and do not provide any personal information. Report the scam to the Treasury Inspector General for Tax Administration at (800) 366-4484 or to the Federal Trade Commission.

If you do owe taxes or think you may owe, hang up and do not provide personal information. Call the IRS at (800) 829-1040 and speak with an IRS representative.

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