In recent years, thousands of people have lost millions of dollars to tax scams and fake communication fraud. The IRS reminds taxpayers to protect themselves from criminals as the number of incidents continue to grow in today’s digital age.
How do scams work?
Scammers make unsolicited calls claiming to be IRS officials, and they can use different languages besides English. They tell their victims they owe the IRS money and must pay it promptly through a preloaded debit card, gift card or wire transfer. They may also leave “urgent” callback requests through phone “robo-calls” or via a phishing email. If the victim refuses to cooperate, the caller becomes hostile and insulting and may threaten arrest, deportation or revocation of a driver’s or professional license.
Alternately, scammers can politely begin asking taxpayers to verify their identity over the phone. They may say they have their tax return, and they just need to verify a few details to process the return. They may also tell their victims they have a refund due to trick them into sharing private information such as Social Security numbers or personal financial information, such as bank or credit cards numbers.
These con artists can sound convincing. They use fake names and IRS identification numbers to appear legitimate. They may use the victim’s name, address and other personal information to make the call sound official. They often alter caller ID numbers to make it look like the IRS or another agency is calling.
New phone scam involving bogus certified letters
The IRS warned people to beware of a new scam linked to the Electronic Federal Tax Payment System (EFTPS), where fraudsters call to demand an immediate tax payment through a prepaid debit card. This scam is being reported across the country, so taxpayers should be alert.
In the latest twist, the scammer claims to be from the IRS and tells the victim about two certified letters purportedly sent to the taxpayer in the mail but returned as undeliverable. The scam artist then threatens arrest if a payment is not made through a prepaid debit card. The scammer also tells the victim that the card is linked to the EFTPS system when, in fact, it is entirely controlled by the scammer. The victim is also warned not to contact their tax preparer, an attorney or their local IRS office until after the tax payment is made.
EFTPS is an automated system for paying federal taxes electronically using the Internet or by phone using the EFTPS Voice Response System. EFTPS is offered free by the U.S. Department of Treasury and does not require the purchase of a prepaid debit card. Since EFTPS is an automated system, taxpayers won’t receive a call from the IRS. In addition, taxpayers have several options for paying a real tax bill and are not required to use a specific one.
The IRS and its authorized private collection agencies will never:
- Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. The IRS does not use these methods for tax payments. Generally, the IRS will first mail a bill to any taxpayer who owes taxes. All tax payments should only be made payable to the U.S. Treasury and checks should never be made payable to third parties.
- Threaten to immediately bring in local police or other law-enforcement groups to have the taxpayer arrested for not paying.
- Demand that taxes be paid without giving the taxpayer the opportunity to question or appeal the amount owed.
- Ask for credit or debit card numbers over the phone.
For anyone who doesn’t owe taxes and has no reason to think they do:
- Do not give out any personal information over the phone. Hang up immediately.
- Contact the Treasury Inspector General for Tax Administration to report the call. Use their IRS Impersonation Scam Reporting web page. Alternatively, 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.
For anyone who owes tax or thinks they do:
- View your tax account information online at IRS.gov to see the actual amount you owe. You can then also review your payment options.
- Call the number on the IRS notice, or
- Call the IRS at 800-829-1040. IRS workers can help.
If you have any further enquiries, or if you require assistance in filing tax returns, please contact us and we will let you know what solutions are available.