Just because tax season has ended doesn’t mean you are free from tax-related scams. In fact, we continue to learn that it’s never really a good idea to ever get too comfortable. Here’s a list of some newer schemes popping up and how they work to ultimately rip off hard-working taxpayers.
We already know that tax scams are at their peak during tax season (makes sense, right?). But these days, summer is proving to be a prime time for people to fall prey to scammers as well. With so many tactics at their disposal, it’s unnerving just how easy it is to become a scammer’s target. Scams currently making the rounds include:
EFTPS Scam
Scams impacting the Electronic Federal Tax Payment System (EFTPS) have already cheated people nationwide and show no sign of slowing down. You’ll know you’ve been targeted when you will get a call from somebody claiming to be from the IRS who will go on to demand immediate tax payment and that the two letters they supposedly mailed to you had been returned as undeliverable. When you question the caller, the scam artist will then threaten you with legal action or even arrest if a payment is not made immediately. As if these threats weren’t enough, the scammer will then warn you to avoid talking to your tax expert, attorney or IRS office until payment has been made.
Pre-Recorded Messages
With this method, the scammer will request that you call back the number indicated in the message immediately. Failure to do so, according to the recording, will result in a warrant will be issued for your arrest. Those who do call the number back will be prompted to pay the fictitious tax bill with a prepaid debit card or by wire transfer. Remember the IRS will NEVER leave an urgent recording requesting a call back.
Private Collection Scam
Another scam on the rise occurs when a scammer contacts you pretending to be a third-party collection agency calling on behalf of the IRS. Don’t fall for it. First, only certified agencies will call to discuss a tax debt. Second, a call with a third-party collection agency will certainly not be the first time you’ve been notified about outstanding IRS debt. And third, if you’ve been working with the IRS on a debt-related matter, you will likely be expecting a follow-up call long before this kind of call happens. In short – a debt collection call from the IRS is not something that simply materializes out of the blue.
People With Limited English Skills
Across the United States, those with limited English language skills have been targeted by phone and email scams. First, scammers will use one’s native language to engage in a conversation then they will proceed to threaten you with deportation, arrest or even license revocation. Finally, scammers will tell you that, to avoid any consequences, the debt must be paid immediately.
Know The Signs
It appears as though scammers are getting better at their craft and have developed some in-depth tricks designed to cheat people out of money. Don’t let this happen to you. First, learn the signs of a tax-related scam then react appropriately.
Tax Scam Red Flags
- Caller demands immediate payment via a prepaid debit card or wire transfer.
- Caller says that the local authorities will be contacted (and you may be arrested) if the payment is not made.
- Caller doesn’t give you the chance to question or appeal the debt owed.
- Caller asks for a credit card or debit card number over the phone.
The IRS Will Never…
- Initiate contact with you by email, text or social media channels.
- Threaten you with lawsuits, imprisonment or enforcement action.
- Call to demand immediate payment using a specific payment method.
- Demand that you pay taxes without giving you the opportunity to dispute the amount.
- Ask for credit or debit card numbers over the phone.
What To Do
If you think you are being targeting by scammers, keep calm and follow these steps.
- NEVER give out personal information.
- Use the IRS Impersonation Scam Reporting page or call 800.366.4484 to alert the authorities.
- Report the activity on the Federal Trade Commission Complaint Assistant website and add “IRS Telephone Scam” in the notes.
Scammers are always deploying new tactics in the hopes of claiming new victims. You can help stop them by educating yourself and your family and friends about these scams and which red flags to watch for. You can also find other great tips in the articles below or you can email Rea & Associates for help with specific concerns.
By Lesley Mast, CPA (Wooster office)