personal finances, security — October 26, 2015

Stymie the Scammers

by Bob Williams

avoid tax scam phone calls

You just hung up the phone, and we can see your blood pressure is still in the “eruption” zone. The caller said he was from the IRS, and demanded you clear up a past-due tax debt immediately. He gave an IRS badge number and everything! So now you have to transfer money to another account or go to jail. The guy even threatened to call your local sheriff’s department to haul you in. How could this happen???

If this sounds like a bad dream – it is. Hundreds of thousands of Americans are getting calls just like this, and every one of them is bogus. Scammers are posing as IRS agents using strong-arm tactics to scare taxpayers into sending them money. But if you know what to look for, you’ll know to hang up the next time you get a call like this. We’ll show you why.

The Secrets

In our example, the first give-away is in the second sentence. The IRS will NEVER call you to demand money. If you really did owe a tax debt, the IRS will first send you a letter by U.S. Postal Service. That letter will have call-back numbers and addresses, with a real human being’s name and contact info.

Next, scare tactics, like threatening to have you arrested, are a sure hallmark of a scam. Taxpayers with tax debts are not arrested, and local law enforcement agencies aren’t involved. Any badge or ID numbers the scammers may give over the phone are guaranteed fiction. Oh, and don’t trust your caller ID on one of these calls. Scammers frequently alter caller ID to make it look like it's coming from the IRS.

The demand that you transfer money to another account, or a type of prepaid card, to satisfy your outstanding “debt,” is also a red flag. If the caller sounds closer to New Delhi than Detroit, chances are that’s where he is: Another reason to think scam.

Remember, the real IRS will NOT:

  • Call you to demand immediate payment. The IRS will not call you if you owe taxes without first sending a bill in the mail.
  • Demand that you pay taxes and not allow you to question or appeal the amount you allegedly owe.
  • Require that you pay your amount due a certain way, such as prepaid debit card.
  • Ask for credit or debit card numbers over the phone.
  • Threaten to bring in police or other agencies to arrest you for not paying.

Some of the latest scammers have gone so far as to copy the IRS logo and use it in fake letters to taxpayers. They went so far as to provide a real IRS address, telling taxpayers to mail a receipt there for the payment they make, in an attempt to make it all look official.

If you get a letter supposedly from the IRS that looks suspicious, call the IRS Taxpayer Support Line at 800-829-1040. The operators will be able to look up your account and tell you if the letter is legitimate or not. But don’t use any phone number appearing on the letter.

So, what should you do if you get a call you suspect is a tax scammer?

Don’t tell them anything. Hang up. Contact the Treasury Inspector General for Tax Administration. Use TIGTA’s IRS Impersonation Scam Reporting web page to report the incident.

You should also report it to the Federal Trade Commission. Use the FTC Complaint Assistant on FTC.gov. Add "IRS Telephone Scam" in the notes.

The Treasury Inspector General for Tax Administration estimates that some 600,000 scam IRS calls have been made since 2013, and thousands of taxpayers have been bilked out of a total of $20 million by these crooks.

Save your money, save your information and save your aggravation. Recognize these calls for what they are and keep your information and your cash in your pocket.

Sign up for more of this.

Subscribe to our blog for year–round finance strategies and tax tips. We’re here to remove the dread from filing taxes.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Please complete the reCaptcha.

It’s not too good to be true. See what others are saying.