IRS Calling? Probably Not.

Don’t yield to scammers’ threats to get you to pay taxes you don’t owe

IRS Calling? Probably Not

Of all the scams out there to steal your money, guess which one ranks #1 among those reported to the Better Business Bureau?

Answer: the IRS scam. It made up 24% of the complaints to the BBB last year.

Here’s how it works. Someone claiming to be with the IRS calls you with a dire warning: The IRS plans to sue you, file a lien against your property, suspend your driver’s license, or send the police to arrest you — unless you pay a delinquent tax bill. You’re given a telephone number to call so you can make the payment by credit or debit card or other means.

One of our clients got such a call and gave me the telephone number he was given. When I called, it was disconnected, suggesting the scammers had already moved on.

Another client said she received a call from someone identifying himself as an IRS officer. He even provided a badge number and a telephone number, although she asked him to repeat the information several times because of his strong foreign accent.

“He asked me to verify that he had my correct name and address, and then asked for the last four digits of my Social Security number,” she said. “I refused to give them to him, but he argued that he’d provided his badge number. When I asked how he could prove he was legitimate, he didn’t answer, but instead told me there were problems with my tax returns for 2009-2014 and that I owed the government $6,435. He said that if I didn’t pay, my driver’s license would be revoked and he would also do something with my mortgage payment. After I questioned him as to why this was my ‘final’ notice when I hadn’t received any previous notices, he hung up.”

The client then called the police, who told her they receive hundreds of similar calls from citizens all over town. “But they didn’t do anything,” she said. “I would have felt better if they had at least written down what I told them.” I explained that the police took no action because they have no way to catch the crook, who almost certainly resides outside their jurisdiction — perhaps even outside the country.

The IRS doesn’t call anyone to demand payments, nor do any government agencies. They send letters to you via the U.S. mail.

That may soon change. A federal law that went into effect Jan. 1 allows debt collectors to make automated calls to cell phones to try to collect money owed on any debts backed by the federal government, including taxes, student loans and mortgages. The FCC has until September to issue regulations about this. Meanwhile, the IRS says it’s looking for ways to help taxpayers avoid confusion between legitimate calls it might make in the future and those made by crooks — for whatever that’s worth.

The best strategy to protect yourself: Don’t prepare your own tax returns. Instead, hire a professional tax preparer — someone who is a CPA, an enrolled agent or a tax attorney. Then, if you ever get a communication by email, mail or phone from anyone claiming to be from the government, simply refer them to your tax advisor. Don’t respond on your own, and never provide any information requested.

If you don’t have a tax advisor, call us — we may be able to provide you with a referral.

Originally published in Inside Personal Finance May 2016

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