By Josie Dillon, CPA
Manager, Tax Services
For the average person, getting a threatening phone call from the IRS would stoke a great deal of fear and anger. But many of these and similar ploys are tax scams perpetrated by criminals out to rob you of your tax refund, or simply steal your identity and drain your bank account.
The IRS has reported a huge increase in phone scams in recent years. Taxpayers will receive a phone call from someone claiming to be an IRS agent threatening people with arrest, deportation, revocation of professional licenses and other terrible results if they do not comply with demands to pay a bogus tax bill.
Some of the most sophisticated scammers will even use “ID spoofing” technology, so your phone’s caller ID function will make it look like the local IRS office is calling.
Or, instead of threats, the caller may tempt you with offers of a huge refund far larger than you’re entitled to. Sometimes these calls will be a live person, or recorded “robo-calls.” There is also an uptick in “phishing” emails that lure people into clinking on a link and having their personal data stolen.
The reason the problem is so prevalent is that these shady tactics work. Since 2013 tax scams have hurt more than 5,000 victims to the tune of $26.6 million, according to the IRS.
There are other types of scams that include unscrupulous return preparers, fake charities and inflated refund claims. For a complete rundown of the IRS’ “Dirty Dozen” of common scams, click here.
Here are things the IRS will never do:
- Call to demand immediate payment, nor will the agency call about taxes owed without first having mailed you a bill.
- 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.
- Threaten to bring in local police or other law-enforcement groups to have you arrested for not paying.
If you suspect foul play, the IRS advises you to immediately hang up the phone and not reply to a suspicious email. Call their scam reporting hotline at (800) 366-4484. Or file a report with the Federal Trade Commission by clicking here.
Stay alert for scams that use the IRS as a lure. Tax scams can happen any time of the year, though they are more common at tax time.
If we can assist you with any tax-related issue, please contact Josie Dillon at (317) 613-7841 or email [email protected].