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How to Spot IRS Scams and Fight Back

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IRS Phone Scams are nothing new, but they are still a serious threat according to the Internal Revenue Service (IRS).
Criminals impersonate IRS agents, other government employees or debt collectors over the phone, online or via the mail in an effort to trick you into sending them money for taxes, penalties or fees you don’t actually owe and also to divulge personal information that they can then use fraudulently.

Authorities say thousands of people—ordinary citizens to professionals—fall prey to these scams each year, losing millions of dollars in the process. According to a Federal Trade Commission (FTC) report, nearly one in five people were victims of impostor scams in 2018—most of those, young people—with roughly $488 million lost.

Scammers take advantage of people’s deep fear of the IRS to scare them into providing sensitive information or money by phone, email, or postal mail. In extreme cases, they may be able to infect computers with malicious software called malware. While its impossible to prevent all types of tax-related fraud that may affect you by reading through the following known tax scams, you can educate yourself about how these tax scams operate to make sure you do not become the victim of an IRS scam.

What You Should Know…

Rather than immediately assuming that the email, letter, phone call, or voicemail that you receive requesting payment or personal information is real, go to IRS.gov and search for the relevant notice or form number and read the IRS’s page Understanding Your IRS Notice or Letter. You can also call the IRS directly at 1(800)-829-1040 to inquire about a letter’s legitimacy.

  • The IRS will never call to demand immediate payment over the phone, nor will the agency call about taxes owed without first mailing a bill and providing an option for a payment plan.
  • The IRS will never threaten to immediately bring in local police or other law-enforcement groups to have you arrested for not paying.
  • The IRS will never demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
  • The IRS will never require you to use a specific payment method for your taxes, such as a prepaid debit card or gift cards or ask for credit or debit card numbers over the phone.

If you receive an email, letter, phone call, or voicemail from someone claiming to be from the IRS and asking for money and you don’t owe taxes, here’s what you should do:

More information on how to report phishing or phone scams is available on IRS.gov.

Current and Known IRS Scams to Lookout For:

’You will need to pay a small fee to get your stimulus check’

This growing scam is related to the government’s ongoing response to the coronavirus pandemic relief efforts, the Federal Trade Commission warns. Many Americans will qualify for a stimulus check, but the government (including the IRS) does not require anyone to pay anything to receive the money. The IRS will post all key information on IRS.gov/coronavirus as soon as it becomes available.

‘We’re calling from the NCUA and we need your financial information’

The National Credit Union Administration (NCUA) insures financial institutions deposits up to $250,000.00, so that consumers do not lose all of their money if a financial institution should fail. However, the NCUA will NEVER send unsolicited correspondence asking for money, sensitive personal information, bank account information, credit and debit card numbers, Social Security numbers or passwords. Scammers claiming to be from the NCUA are hunting for information they can use to commit fraud or sell identities. NCUA would never request personal or financial information in this manner. See NCUA’s Privacy Policy for more information.

‘We’re calling to tell you your identity was stolen; you need to purchase cards to fix it’

In this scam, a scammer will call posing as an IRS agent. The criminal claims the victim’s identity has been stolen and that it was used to open fake bank accounts. The caller then tells the taxpayer to buy certain gift cards; later, the criminal will get back in-touch with the victim and will ask for the gift card access numbers.

‘We will cancel your Social Security number or benefits’

The Inspector General of Social Security Administration warns Americans about widespread phone scams where callers may impersonate Social Security employees or claim a Social Security-related problem, to gain your trust and steal your money. The Social Security Administration urges everyone to be very cautious of any unsolicited calls, letters, emails, or texts offering a benefit increase in exchange for payment.

‘The Bureau of Tax Enforcement will be putting a lien or levy on your assets’

This scheme involves the mailing of a letter threatening an IRS lien or levy. The lien or levy is based on bogus delinquent taxes owed to a non-existent agency; “The Bureau of Tax Enforcement.” Scammers send out fake forms that have an illegitimate IRS address, ask the taxpayer to make the check out to the IRS rather than the United States Treasury, and instruct the taxpayer to send payment immediately and dispute it later, even if he or she disagrees with the amount of the notice. The IRS allows taxpayers to dispute claims of unpaid taxes first and pay after an agreement is reached.

‘If you don’t return our call immediately, we will have you arrested’

Criminals can make a caller ID phone number look like it’s coming from anywhere—including from the IRS, the local police or another intimidating source. The IRS will never make the first contact with you by phone regarding your tax situation, let alone leave prerecorded voicemails, especially ones that claim to be urgent or are threatening.

‘Please fill out this W-8BEN form in order for us to check your claim’

The Form W-8BEN, is called a “Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding,” this is a legitimate IRS form. However, criminals have been modifying the form to ask for personal information such as mother’s maiden name, passport numbers and PIN numbers. If you receive a request to fill out this particular form first, view the real W-8BEN form and compare the document you were sent to fill out. If the document you were sent differs from the real form, do not fill out the requested information and report the scam.

‘Click here to see the details regarding your tax refund emails’

Emails like these are intended to trick the reader into clicking on links that lead to a fake IRS-like website and expose the user to malware. The IRS never emails taxpayers about the status of their tax refunds. If you haven’t received your tax refund after at least 21 days of filing online or six weeks of mailing your paper return, go to a local IRS office or call the federal agency at 1(800)-829-1040. You can also use the IRS’s refund tracker for federal tax refunds. You will need your Social Security number, filing status and your refund amount.

‘We’re from the Taxpayer Advocate Service and we need some information to better assist you’

The Taxpayer Advocate Service is a legitimate organization within the IRS that helps people by assisting them with IRS problems. Although the Taxpayer Advocate Service can be used by anyone, the organization does not call taxpayers for no particular reason. According to the IRS, criminals make phone calls look like they’re coming from the Taxpayer Advocate Service office in Houston, TX or Brooklyn, NY, and when taxpayers return the calls, victims are told they’re entitled to a large tax refund and then are asked for personal information such as a Social Security number.

‘Click on this to see your tax transcript’

A fraudster may send you an email with an attachment they claim is your taxpayer tax transcript. A tax transcript is a summary of a person’s tax return and is a valid document that the IRS provides. However, the IRS *does not email tax transcripts. You may request a tax transcript directly from the IRS, which will then be mailed to you.*

‘You owe backed Federal Student Tax’

Scammers continue to use varied strategies to trick people, in this case, they try to convince students to wire money immediately to the scammer. If the victim does not fall quickly enough for this fake “federal student tax”, the scammer then threatens to report the student to the police. The IRS warns that taxpayers should remain vigilant and not fall prey to these aggressive calls demanding immediate payment of a tax supposedly owed.