Is The IRS Calling You? Probably Not, So Beware The Scam!
Halloween is a time to celebrate being scared. Scared in a fun way, the way in which no harm comes to you or people you care about. But a recent article in the Detroit Free Press reminds us that there are times in our lives when it is appropriate to be scared. Our brains perceive a threat (real or not) and we instinctively react to protect ourselves. In other words, being afraid of things helps keep us alive. Some scam artists target this predictable reaction in people in order to steal their victim’s money.
For example, when a government agency like the Internal Revenue Service contacts you, there is a very real chance it is going to cost you some money. This alone will cause some people’s fears to be triggered. However, when the IRS threatens to bring criminal charges against you, that’s probably a threat you have never faced before in your life. How would you react if the IRS threatened charges which would land you in jail in a matter days? Regardless of what you decide to do, your fear kicks in to high gear, you ares suddenly compromised by the threat, and you start looking for ways to make the threat go away … the quicker the better.
There is a scam being perpetrated against the taxpayers of The United States by which the criminals will call their targets at home pretending to be with the IRS. The severity of the calls have varied, and the article from the Detroit Free Press does a good job of showing us just how effectively the scammers use people’s fear of the IRS to achieve their crimes. From the article:
“Since October 2013, the U.S. Treasury Inspector General for Tax Administration has received more than 130,000 complaints relating to the scam and has had reports of more than $8 million in losses nationwide.”
As someone who works in the tax industry, I can tell you that our clients have been targeted more in 2014 than in any prior year. A typical scenario will play out like this: our client receives a call by someone claiming to be with the IRS. They tell our client that they owe an additional amount for a prior year tax filing (typically a few thousand dollars) and if they would like to avoid official audits or agents paying a visit to their house, they can settle up right now and make the problem go away. Fortunately so far, none of our clients (that we are aware of) have succumbed. Instead, they hang up and their next call is to us saying “I just received a call from the IRS and they said we owe them money.” As soon as they say these words, we know immediately it is a scam.
The IRS will not call a person UNLESS that person initiated a phone call with the IRS. The IRS will only initiate a written correspondence through the mail with you. That is their standard operating procedure. As far as your state’s department of revenue or taxation, it likely follows the IRS in this practice (but you can check with them to be sure.)
What about emails? To help put it in context, I make calls to the IRS just about every week, and for all of our conversations on the phone and written correspondence through the mail, I received a total of ONE (1) email from the IRS in the past 12 months, and that was to remind me that I needed to renew my Preparer Tax Identification Number (PTIN). So if you receive emails from anyone claiming to be with the IRS, it is not the IRS.
What should you do if you receive a call or an email? Hang up on them, make note of the number. If email, do not reply to them or click on any links. Report the incident to the Treasury Inspector General for Tax Administration at 1-800-366-4484. That is all you can do. But whatever you do, NEVER give the scammers ANY of your personal information (such as confirming your social security number with them), and certainly never surrender any financial information (such as credit card information.)
And if you are trick-or-treating with your kids this year, dress up as an IRS agent and watch the reaction of the parents as they open the door. They might laugh on the outside, but you’ve given them a genuine scare on the inside.