Of the communications you’re likely to take most seriously as a taxpayer, little can compare with a call from the IRS. This makes the recent rise in IRS tax scams all the more worrisome. These false phone calls and emails, which claim to be from the IRS, prompt taxpayers to pay sums to fraudsters instead. Therefore, use caution if you receive an email or telephone call purportedly from the IRS.

Most important to remember is that the IRS always notifies taxpayers of tax owed or refunded through written US mail. Furthermore, the IRS will never ask you to disclose personal or financial information over the phone.

Falling victim to a tax scam can be very costly—not only in money but in the amount of time and aggravation it can take to straighten out the resulting mess. This overview will give you a good idea of how these scams are being conducted and what you can do to stay out of their path.

Phone Scams

The IRS has issued a warning about a pervasive phone scam, which the Treasury Inspector General for Tax Administration (TIGTA) has called the largest scam of its kind. It has received reports of over 20,000 related contacts, and thousands of victims have paid over $1 million to fraudsters claiming to be from the IRS.

What to Look For

Potential victims are threatened with deportation, arrest, having their utilities shut off, or having their driver’s license revoked. Callers are frequently insulting or hostile—apparently to scare their potential victims, who may be told either that they are entitled to big refunds or that they owe money that must be paid immediately to the IRS. When unsuccessful the first time, sometimes these phone scammers call back trying a new strategy.

Thieves who run this scam often:

• Use common names and fake IRS badge numbers
• Know the last four digits of the victim’s Social Security number
• Make your caller ID appear as if the IRS is indeed calling
• Send bogus IRS emails to support the bogus calls
• Make background noise to simulate other calls being conducted, as if from a call site
• Call a second time claiming to be the police or department of motor vehicles (a claim usually also supported by caller ID)

What to Do

The IRS always sends taxpayers a written notification of any tax due via the US mail. More important, the IRS will never ask for credit card, debit card, or prepaid card information over the telephone—so if the contact has asked you for these items, it’s a good indication they’re part of the scam.

If you get a phone call from someone claiming to be from the IRS, and you think you owe taxes, hang up and call the IRS at (800) 829-1040—or, better yet, call your tax advisor for help. If you don’t owe taxes or have no reason to think you owe any taxes, hang up and call to report the incident to the Treasury Inspector General for Tax Administration at (800) 366-4484.

Anyone targeted by this scam should also file a complaint with the Federal Trade Commission using the FTC Complaint Assistant at FTC.gov and adding “IRS telephone scam” to the comments portion of the complaint.

Email Scams

Be on the lookout as well for possible email scams that use the IRS as a lure. The IRS does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels. The IRS also does not ask for PINs, passwords, or similar confidential access information for credit card, bank, or other financial accounts via email or any other means.

If you receive a suspicious email, do not open any attachments or click on any links contained in the message. Instead, forward the email to phishing@irs.gov.

Conclusion

We hope this information will help keep you safe from potential IRS tax scams. If you have any questions, need additional information, or require any other assistance, contact your Moss Adams professional.