Tax season can be full of anxiety, but it’s also an opportunity for scammers to take advantage of unsuspecting taxpayers.
This article will discuss how to recognize tax scams, report them if necessary, and learn more about your rights as a taxpayer.
With this information, you’ll be better prepared to protect yourself from potential tax scammers.
Types of Tax Scams
There are two common types of scams: tax collection and verification.
Tax Collection Scam
In a tax collection scam, you will usually get a phone call or letter demanding that you pay them money immediately. They may even threaten to arrest you if you don’t pay.
Tax Verification Scams
In verification scams, email or text messages will likely ask for your personal information and often provide a clickable link or a button to a fraudulent form or website.
The scammers are trying to get your personal or financial information and possibly access your accounts.
Is the IRS Calling or Knocking on Your Door?
Knowing how to tell the difference between when the IRS is actually trying to reach you versus a potential scam is essential.
The IRS will usually notify taxpayers through regular mail via USPS. Occasionally, an IRS employee may come to your home or call you due to an overdue tax bill, a delinquent (unfiled) tax return, or nonpayment of employment taxes.
They may also visit or contact you due to a collection investigation, audit, or ongoing criminal investigation they are running.
Be aware that if the IRS does try and contact you personally – be it through phone calls or visiting your home – they will usually have provided earlier notification through the mail first.
Beware of Tax Impersonators
Deceptive practices may come in the form of phone calls, letters, or emails from people impersonating the IRS, using intimidating language, and asking for personal information such as credit card numbers to pay an alleged bill.
To protect yourself, remember that the IRS will never contact you by phone unless:
1) You specifically requested that they do.
2) They previously sent you a notice in the mail.
3) They previously discussed your tax issue with them by telephone.
If ever contacted by someone claiming to be from the IRS, take a moment and verify their identity before giving out any details.
Signs That It’s Not the IRS
- The Internal Revenue Service will never contact you out of the blue and demand immediate payment through an unusual method such as a pre-paid debit card, gift card, or wire transfer. If taxes are due, they will first mail a bill to the taxpayer responsible for them.
- The IRS will never threaten to use local law enforcement to arrest you for not making payment immediately.
- The IRS will never demand payment of taxes without providing the opportunity to question or challenge the amount due.
- It is important to remember that the IRS will never contact you out of the blue regarding a tax refund.
How to Report Tax Fraud
- If you have encountered a scam artist trying to impersonate the IRS, report them immediately on the Treasury Inspector General for Tax Administration’s Impersonation Scam Reporting webpage at https://www.tigta.gov.
- To report impersonation scams, you can also call 800-366-4484.
- If you receive a suspicious email claiming to be from the IRS, or a related company such as Electronic Federal Tax Payment System, do not hesitate and report it immediately! Send any relevant information to [email protected] for further investigation and review.
- For a comprehensive listing of recent tax scams, consumer alerts, and how to report them, visit Tax Scams & Consumer Alerts at https://www.irs.gov/newsroom/tax-scams-consumer-alerts.
Taxpayers’ Bill of Rights
Staying informed of your rights as a taxpayer is an essential part of protecting yourself against tax scams.
Knowing what the IRS can and cannot do when it comes to collecting taxes and the several protections available through the Taxpayers’ Bill of Rights can help ensure you are not taken advantage of by tax scammers.
The Taxpayers’ Bill of Rights includes the following:
- The Right to Be Informed
- The Right to Quality Service
- The Right to Pay No More than the Correct Amount of Tax
- The Right to Challenge the IRS’s Position and Be Heard
- The Right to Appeal an IRS Decision in an Independent Forum
- The Right to Finality
- The Right to Privacy
- The Right to Confidentiality
- The Right to Retain Representation
- The Right to a Fair and Just Tax System
You can learn more about your Taxpayer Rights by visiting the IRS website here… https://www.irs.gov/taxpayer-bill-of-rights.
How Do I Get Tax Help?
Getting the tax help you need is simple. The IRS provides various assistance options to taxpayers seeking advice and help with tax filing.
To get started, use the Taxpayer Assistance Locator tool to find the office closest to you – make sure to check what services are offered by that particular office.
Once you’re ready, call them at 844-545-5640 and set up an appointment for help.
Tax scams are not uncommon and can harm both individuals and businesses. It is essential to remain vigilant and knowledgeable and recognize when a scam artist is trying to take advantage of you.
Remember that it is always best practice to contact the IRS directly or seek professional help for any tax issues or questions rather than relying on someone who contacts you out of the blue.
Familiarizing yourself with the Taxpayer Bill of Rights can also help you better protect yourself against fraudulent activity.
Finally, if you encounter a tax scam, report it to the authorities as soon as possible!
Never fall victim to a malicious scam artist claiming to be from the IRS!
Tax Scams FAQ
This Tax Fraud FAQ section provides helpful information and critical steps to take if you believe you or someone else is a victim of tax fraud.
From verifying an IRS agent’s legitimacy, reporting suspected fraud, and potentially earning money by reporting it, this guide covers everything you need to know about potential tax scams.
Read on for more tips and resources that can help you stay informed and protected from tax scams.
How do tax refund scams work?
Tax refund scams are a prevalent form of fraud today and have potentially devastating consequences for unwitting victims. Scammers impersonating the IRS can contact those filing taxes to try to steal their Electronic Filing Identification Numbers (EFINs) and the accompanying data. The criminals then use this information to file fraudulent tax returns and receive undeserved refunds. To protect yourself against these scams, it’s crucial to be proactive in monitoring suspicious emails that appear to originate from the IRS. Be sure you understand the signs of a legitimate email so that you, and the government, can be protected from this growing problem.
How can I tell if a letter from the IRS is real?
If you’ve received a letter from the IRS, it’s essential to make sure it’s genuine. Fortunately, a few tell-tale signs can help – checking for a notice number (CP) or letter number (LTR) will give you an idea of whether you’re dealing with the actual IRS. If not present, then it’s likely fraud. Don’t worry, though. It can all be verified easily by calling the IRS directly at 800-829-1040. Calling the number is the best way to ensure any correspondence from the IRS is authentic and represents your actual tax situation.
Will the IRS ever contact you by phone?
Taxpayers should always be wary of unexpected calls that seem to originate from the IRS. Actual IRS employees will only contact taxpayers by phone after an initial attempt to contact them through the postal service. If you receive a call from someone claiming to be from the IRS, you should ask for their name, title & employee identification number. The caller should also provide you with a telephone number to verify their identity as an official representative. If you’re unsure, hang up and contact your local IRS office directly.
Does the IRS leave voicemails?
It’s important to remember that the Internal Revenue Service (IRS) will not leave prerecorded, urgent, or threatening voicemails. If you’ve received a voicemail that claims to be from the IRS and it is of this nature, it is likely a scam. The IRS communicates primarily through the mail when they need to contact taxpayers regarding money owed. You can also get more information about the status of your tax return by visiting the IRS website or calling their customer service number directly. Don’t call the number left on the voicemail.
Would the IRS ever come to my house?
Generally, the IRS will not come directly to your house unless there is a suspicion of fraudulent activity. However, any contact with IRS Special Agents should be taken very seriously, and professional legal counsel should immediately be contacted. If you understand why criminal activity has been suspected, you may want to offer cooperation and comply with requests that Special Agents provide with your lawyer present. Your cooperation can ensure a smooth and successful investigation. In doing so, you may be able to work towards resolving the issue quickly.
Does IRS ask for pre-paid debit cards or gift cards?
No, the IRS will never ask for payments through pre-paid debit cards or gift cards. Any time the IRS asks for money, they will always provide an official address and clear instructions on how to make a payment. The Internal Revenue Service only accepts payments through their secure online portal or by check/money order sent to their official addresses listed on IRS.gov. If you receive any communication from someone claiming to be from the IRS, double-check all details before sending over any money.
How do I know if an IRS agent is real?
Fortunately, there is a way to check the validity of an enrolled agent. If you need to verify someone’s status as an authorized enrolled agent, you can send a request for verification directly to [email protected]. In your request, include the full name, complete address (if available), and Enrolled Agent Number (if available). Providing this information will enable the IRS to accurately assess the legitimacy of the individual and give you peace of mind.
How do I report tax fraud or identity theft?
If you suspect someone has been using your Social Security number (SSN) to file taxes on your behalf or believe you may be a victim of identity theft, report it immediately. You should contact the IRS Identity Protection Specialized Unit at 800-908-4490 and provide the information about the incident. Additionally, if you have had financial accounts opened in your name without authorization, contact one of the three major credit reporting agencies to place a fraud alert on your account. This will help protect you against future fraudulent activity by alerting creditors to any new requests for credit made in your name. Finally, consider filing an FTC complaint as well. The FTC can investigate potentially fraudulent activity and work to resolve the issue. It is also a good idea to file a police report with your local law enforcement agency.
Can you get money for reporting someone for tax fraud?
Are you aware of someone who might be committing tax fraud? You can get money for reporting someone committing tax fraud. The IRS Whistleblower Office awards monetary compensation based on the information they receive from whistleblowers. Typically, an award will fall between 15 and 30 percent of the recovered funds and depend on several other factors. Take advantage of this opportunity to potentially earn some money while also doing the right thing and