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How to Determine if the IRS is Calling or Knocking on Your Door

Contributors: Karen Connair, Partner, Tax & Business Services, Katrina Nieh, Staff, Tax & Business Services & Janice Song, Intern, Tax & Business Services

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Discerning communication with a legitimate IRS representative is proving to be a much more difficult task for taxpayers today as a result of an increase in tax fraud. It is not uncommon for IRS agents, revenue officers, or criminal investigators to occasionally visit taxpayers, sometimes unannounced. These visits most often target taxpayers who owe taxes or have not filed tax returns, taxpayers who are currently being audited, or taxpayers involved in investigations. However, scammers have become increasingly alert to these situations, posing as IRS agents to target these individuals in fraudulent tax schemes.

What makes these scams believable is that scammers have possession of the taxpayer's personal information. They frequently will telephone, and more recently have started to visit taxpayers, falsely claiming to be IRS representatives and deceiving taxpayers by revealing personal information. Once baited, the "agent" essentially threatens the individual with immediate action, ranging from seizure of property to incarceration, as the result of failure to pay on taxes due. Businesses are also targeted in these scams – many are threatened with immediate closure or shut-off of utilities if tax payment is not received within 24 hours. Scammers claim the only way to remedy the situation is to make an immediate payment but only by the means of money orders or prepaid cards. With these looming threats, taxpayers are induced to comply with the scammers' requests, only to realize later they have been duped.

How to Know it's Really the IRS

The IRS reminds taxpayers to stay alert to scams that use the IRS as a lure. Tax scams can occur at any time of the year, not just at tax time.

All taxpayers, regardless of their situation, should be aware of their rights as laid out in the Taxpayer Bill of Rights. Among these rights is the right to be informed. Typically, the first official contact from the IRS will be written correspondence delivered by regular mail via the United States Postal Service, informing a taxpayer of a change in their tax circumstances. In the case of an unannounced visit, an IRS representative will always provide two forms of official credentials: a pocket commission and a HSPD-12 card. Taxpayers have the right to see these credentials and should request them from anyone representing to be from the IRS.

What the IRS Will Not Do

Taxpayers should be aware that the IRS will not demand immediate payment or require a specific payment method such as a prepaid debit or gift card, or a wire transfer. If a taxpayer owes taxes, generally the IRS will first mail a bill to the taxpayer with the amount owed. All payments due, including those indicated by an IRS representative, are to be made out to the US Treasury. If someone representing him or herself as an agent of the IRS requests payment made out to any entity other than the U.S. Treasury, it is a sure sign of fraud.

The IRS will not demand that you pay taxes without the opportunity to question or appeal the amount owed.

The IRS will not threaten to bring in local police, immigration officers, or any other law-enforcement official to have you arrested. Threats to revoke a driver's license, business licenses, or immigration status are common scare tactics scammers use to trick their victims. The IRS does not have the authority to revoke these or other licenses. (State agencies may, though).

Your Rights as a Taxpayer

Taxpayers have the right to retain representation or to challenge the IRS's position in a timely manner. If a scammer claiming to be an IRS agent contacts you and demands payment, it is best to contact your tax professional or the IRS to verify the claims. For more information on taxpayer rights, visit the IRS website - Taxpayer Bill of Rights

Who to Contact

Should a tax collection call turn out to be fake, the taxpayer should contact the IRS and Federal Trade Commission to alert them to the scam.

Contact the Treasury Inspector General for Tax Administration to report a phone scam. Use the agency's "IRS Impersonation Scam Reporting" web page to report a scam online. You can also call 800-366-4484.

Phone scams should also be reported to the Federal Trade Commission. Use the "FTC Complaint Assistant" at FTC.gov. Add "IRS Telephone Scam" in the notes.

Report an unsolicited email claiming to be from the IRS, or an IRS-related component like the Electronic Federal Tax Payment System, to the IRS at phishing@irs.gov.

For more information, visit the IRS website.

 
Contributors
Karen  Connair

Partner
Tax & Business
Irvine, CA
 
 
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