IRS Phone Scam: How to Protect Yourself From IRS Telephone Fraud
If you read the news we're sure that you've seen the stories regarding the IRS phone scam and the issues that the IRS has experienced with identity theft recently. You may have even gotten a call from someone posing as an IRS agent telling you that you owed on your taxes. Across the country Americans are receiving calls like this on a daily basis.
Why You Keep Getting Calls From IRS Scammers
You yourself might not stress tax day when it comes every year, but for many other Americans it's a real cause of anxiety. Quicken found that 51% of Americans feel some level of tax-related anxiety. A call from someone posing to be from the IRS and demanding that you pay up, or face consequences, could shake you. Scammers have realized that there are billions of dollars at their access if they just reach the right people and can be convincing enough.
These scammers become more convincing with practice and have established networks of bank accounts and unknowing helpers throughout the U.S. making it easier for them to steal your money.
Below are a few of the most common variations of IRS-related scams:
The Bureau of Tax Enforcement Scam
One of the most recent tax scams includes impersonation of agents from the Bureau of Tax Enforcement. Scammers copy the IRS protocol of sending a letter before making a phone call. The letter threatens to place a lien on the taxpayer’s property due to delinquent taxes. The taxpayer believes the claim is real since most people know the IRS can and does place liens on properties. The scammer follows up with a phone call demanding immediate payment of the bill. Taxpayers often give the requested information or make payments out of fear of losing their homes or property.
However, the Bureau of Tax Enforcement does not exist. It is a fake agency designed to scam people out of money and personal information. If you get a letter from the Bureau of Tax Enforcement shred it and ignore calls from them.
The Taxpayer Advocate Service Scam
Unlike the Bureau of Tax Enforcement, the Taxpayer Advocate Service (TAS) is a real agency under the IRS. Taxpayers, tax professionals and businesses manage tax issues directly with the IRS or its subsidiary, the TAS. The agency refers to itself as “Your voice within the IRS” and offers its services for free. You can contact the Taxpayer Advocate Service for help with tax debt, overpayment, or other financial problems. TAS offers a Toolkit to help taxpayers with filing taxes and to understand their rights. The TAS operates at least one office in each state.
Scammers have been calling people impersonating the Taxpayer Advocate Service. By pretending to be the TAS and offering help, scammers are easily able to convince their victims to give over sensitive personal and financial information Like the IRS, TAS will never make contact by phone or email.
The "Ghost" Tax Return Preparer Scam
The IRS states that nearly 54% of taxpayers used a paid tax preparer to file their returns in 2017. Sadly, phony tax preparers steal information, too. These unethical tax preparers use personal information for identity theft and filing false returns. The IRS refers to the phony tax preparers as “ghost” preparers. Real tax professionals have credentials and proper identification. Fly-by-night agencies supply none of that information and evade answering any questions about their training or experience. Taxpayers should avoid being scammed by “ghost” preparers by noticing these red flags:
- People should run the other way if the paid preparer refuses to sign the tax return. The IRS requires paid tax preparers to sign all completed tax forms and include their Preparer Tax Identification Number (PTIN).
- The tax preparer offers to file your tax forms for a percentage of your refund.
- You are encouraged to lie about deductions to increase the refund. New tax laws help to prevent claiming excess deductions.
- The preparer offers an excessive refund.
Tax Professionals are Targets, Too
Scammers target tax professionals with the goal of stealing client information and filing phony returns. Some signs of a scam include:
- Receiving unsolicited software updates.
- Suspicious emails or notifications requiring the system to use a cloud-based program.
- Signs that the computer system has been compromised.
The Importance of Filing Taxes Early
Tax season gives scammers a golden opportunity to reel in new victims. The IRS says the best way to avoid phone scams and identity theft is to file your taxes early. Don’t wait until April. Instead, file as soon as you receive tax forms from your employer and other sources.
The IRS suggests using electronic filing to get your tax refund as soon as possible. Most government agencies, including the Social Security Administration and Veterans Affairs, use direct deposit for payments. The IRS states direct deposit is "simple, safe, and secure."
Online services, like TurboTax, make filing electronically easy. Taxpayers using accountants should ensure that the accountant or company is legitimate and has a good track record. Scammers target tax preparers as well, stealing social security numbers and financial information. They also use the professionals’ electronic filing software to file phony tax returns.
More Ways to Protect Yourself From the Many IRS Scams
It seems difficult, if not impossible, to spot an IRS scam. However, the IRS and FTC offer sure-fire ways to spot phone scams quickly – before any information changes hands.
While con artists continue to think up new tactics to trick victims, there are sure-fire ways to spot a phony IRS call quickly. If a caller tries one of these five measures - contrary to how the real IRS operates - you'll know it's a scam:
- Demanding immediate payment, and calling you regarding owed taxes without first sending you an official bill via snail mail.
- Demanding you pay taxes without allowing you to question or appeal the amount you owe.
- Requiring you to pay owed taxes a certain way, such as by prepaid debit card or wire transfer.
- Asking for your credit or debit card numbers over the phone.
- Threatening to bring in police or other agencies to arrest you for not paying.
- The IRS would never ask for payment via Google Play, iTunes or any other type of gift card. Fake agents from the IRS agency never threaten to send the police to collect a debt if the fee is unpaid.
To protect yourself, the FTC and other watchdogs recommend:
- Do not believe anyone who calls and claims to be from the IRS, Social Security or your local police department and then demands that you hand over personal information on the spot.
- Demand payment for taxes without allowing you to question or appeal the amount owed.
- Requiring you to pay owed taxes a certain way, e.g, wire transfer, iTunes, Google Play or any other type of pre-paid or gift card
- Don't verify the last four digits of your Social Security number, your bank account information or even your date of birth when someone is making demands.
- Pay attention to warning signs, such as the IRS notifying you that more than one tax return has been filed using your ID.
- An impostor may use aggressive phrases like "Please do not interrupt me while I am speaking."
- Do not click on any links or attachments in suspicious emails.
- Protect your Social Security number throughout the year.
- Don't leave tax return information out in the open or tucked in a backpack or briefcase that's left in your car.
- Never discuss taxes or personal information over social media, email or unsecured internet connections.
- File your tax return as early in the tax season as you can to beat ID thieves to the punch.
- Do not file your tax return from a coffee shop or other public area. Use a secure internet connection if you file electronically. If sending a paper form, mail your tax return directly from the post office.
- Research a tax preparer thoroughly before you hand over personal information.
- Check your credit report at least once a year for free at annualcreditreport.com. Make sure no one has opened a new account in your name.
For more information we've created this guide with five easy steps to identify the IRS phone scam.
If you have fallen behind on taxes, the IRS offers many different options for paying back taxes. If you think you might owe taxes you can call the IRS at 1-800-829-1040 to learn if you do owe money and find out more about their different payment options.
If you have been contacted by an IRS phone scammer you should report it to the the TIGTA at 1-800-366-4484 or at www.tigta.gov, as well as the Federal Trade Commission's FTC Complaint Assistant. In addition, you can help warn others by leaving your feedback on scam phone numbers in our reverse phone number lookup app for iPhone. If you don't have an iPhone, you can still run reverse number lookups on our website and leave your feedback to help others avoid scams.