Don't Mess With Taxes

Feeling left out because tax scammers have been focusing lately on tax preparers?

Don't. Crooks likely will be calling or sending you an email soon enough.

The Internal Revenue Service says that everyone, individual taxpayers and tax pros alike, are potential victims of identity theft schemes as we head into what used to be a slower time for taxes.

"We continue to urge people to watch out for new and evolving schemes this summer," IRS Commissioner John Koskinen said in an alert issued today, June 26. "Many of these are variations of a theme, involving fictitious tax bills and demands to pay by purchasing and transferring information involving a gift card or iTunes card. Taxpayers can avoid these and other tricky financial scams by taking a few minutes to review the tell-tale signs of these schemes."

Tax pro targets: Cyber crooks most recently have been trying to lure tax professionals into sharing their professional data and IRS ID numbers.

If the phishing con artists can get their hands on that info, it makes it incredibly easy for them to file harder-to-spot fake tax returns claiming fraudulent refunds.

Taxpayers in con artist sights, too: Those fake filing/refund money goals are the same for cons who target individual taxpayers. Once they con us into revealing our personal and tax data, then the criminals file returns using our names, address and ID numbers, but have the fake refunds sent to the illicit accounts.

Other tax criminals pretend to be IRS agents and demand payment for federal tax bills that we don't really owe.

Koskinen and his agency today issued specific warnings about four types of tax scams that are prevalent (or possible) so far this summer.

1. "Robo-call" Tax Bill Messages: The pervasive telephone tax scam in which crooks pretend to be IRS agents is still around. In this automated version of what's been dubbed biggest tax scam ever, crooks pretend to be IRS employees and leave messages demanding the victims call the given number back to discuss immediate payment of a purported overdue tax bill. If you don't call back, according to the scam message, a warrant will be issued for your arrest.

When you do connect, the fake tax agent demands immediate payment either by a specific prepaid debit card or by wire transfer, again usually under threat of arrest or other legal action.

Don't fall for it. The IRS does not call and leave prerecorded, urgent messages asking for a call back. Simply ignore this message. You can, if you want, save it to play at parties to educate and entertain your guests.

2. EFTPS Scam: This variation of the original phone con showed up earlier this month across the United States. Here the calling crook invokes the real IRS e-payment option known as EFTPS, or Electronic Federal Tax Payment System.

In this ruse, con artists claiming to be from the IRS call taxpayers and demand immediate payment of due taxes. To bolster the lie, the crooked callers say that two certified letters mailed to the taxpayer were returned as undeliverable. The scammer then threatens to arrest the victim if he/she doesn't immediately make a payment by a specific prepaid debit card. The caller says the debit card is linked to EFTPS. It isn't. Instead, it goes directly to the scammer.

And in order to slow down investigation of the con, the scammer also tells victims not to talk to their tax preparer, attorney or the local IRS office until after the payment is made.

3. Scams Targeting People with Limited English Proficiency: Crooks, tax and otherwise, usually seek out the most vulnerable as targets. In the tax scam world, these often are taxpayers for whom English is not their native language and who also have limited proficiency in their adopted country's tongue.

The IRS continues to receive reports that these folks nationwide are targets of phone scams and email phishing schemes.

In these specific schemes, con artists often approach victims in their native language. They tell their victims they owe the IRS money and must pay it promptly through a preloaded debit card, gift card or wire transfer. If the payments aren't made quickly, the crooks then threaten the victims with, among other things, deportation, police arrest and license revocation.

4. Private Debt Collection Scams: Under a new law, the IRS recently turned over some overdue tax accounts to private bill collectors. Now the IRS and consumer advocates are worried that con artists will use the collection agency angle to steal from taxpayers.

If a real, IRS-hired debt collector does have your tax case, you should have received letters, not only from the IRS, but also from one of the four authorized collection agencies.

The IRS notes that the IRS, the number of these cases is small. Also, if you're in that limited collection category, you should already be aware of your long-over tax debt. In fact, the IRS would have previously contacted you and similarly situated owing taxpayers about these debts.

So far, the IRS hasn't received any reports of tax cons using a private debt collection ploy, but be careful. You don't want to be the first — or any! — victim of this — or any! — type of tax scam.

Look for scam signs: You've heard and read these warnings before, but they bear repeating since the crooks are not letting up in their efforts to steal your identity and money.

The IRS (and its authorized private collection agencies) will never —

• Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. The IRS does not use these methods for tax payments. Any and all tax payments should only be made payable to the U.S. Treasury, never to third parties.
• Demand that taxes be paid without giving the taxpayer the opportunity to question or appeal the amount owed. The IRS usually first mails you a bill that you can examine and dispute. 
• Ask for credit or debit card numbers over the phone.
• Threaten to immediately bring in local police or other law-enforcement groups to arrest a taxpayer for not paying.

If you know you don't owe taxes and don't have any reason to think you've underpaid Uncle Sam, then —

• Don't give out any information. Hang up immediately.
• Do contact the Treasury Inspector General for Tax Administration (TIGTA) to report the call. Use TIGTA's IRS Impersonation Scam Reporting web page or call toll-free (800) 366-4484.
• Do report the scam attempt to the Federal Trade Commission (FTC). Use the online FTC Complaint Assistant on FTC.gov. Add "IRS Telephone Scam" in the notes section.

If you know or think you might owe taxes, then —

• View your tax account information online at IRS.gov to see the exactly how much you owe. Then review your payment options.
• Call the number on any billing notice you've received.
• Call the IRS toll-free at (800) 829-1040 to talk with a real IRS representative about your options.

Be wary, stay alert: The bottom line is to be skeptical.

Even if you know you owe, don't automatically take the word of any caller or unknown e-mailer. Double check your tax debt situation. Then talk with a tax pro and/or the IRS about how you can clear things up legally.

It's no fun to pay the IRS additional tax, but it's far better to have the money go to the real U.S. Treasury and not a crook's account.

You also might find these items of interest:

• How to tell if that IRS agent on your porch is legit
• 5 ways to protect your tax identity and refund money
• Fear you might be a tax ID theft victim? Here's what to do