The ongoing IRS telephone tax scam just keeps going, and going and going ... and going, like some kind of evil battery mascot out to steal your money. In this rip-off, imposters call, pretending to be from the IRS, claiming you owe tax and must pay immediately or lose your driver’s license, your business license, face deportation or go to jail.
The scam has been going for two years now, the Treasury Inspector General for Tax Administration has fielded reports of about 600,000 contacts and nearly 4,000 victims who have been scammed out of $20 million.
It works like this: A scammer calls, claiming to be an IRS agent or from another agency, such as a state motor vehicle registry, and says you owe tax and must pay immediately or face grave consequences. The callers will alter, or “spoof,” caller ID services to make it look like they are calling from the actual agency, and often research you online to pick up personal details to prove they have access to your records. They will even use official IRS titles and give out a badge number to identify themselves.
They will demand that you pay through an online service or untraceable cash or debit card, often directing victims to a bank or convenience store to make the payment.
The IRS has simple advice on how to handle these thieves: Just hang up. The IRS will not contact you by phone without first sending you a bill in the mail. And, the tax agency notes, the IRS does not demand immediate payment. In fact, the IRS maintains a pretty generous program to settle unpaid back taxes, charging just three percent interest on unpaid balances.
Now the tax scammers are spreading beyond the phone. In August 2015, the IRS warned that the con artists are copying official IRS letterhead to contact victims through email or regular mail. In another new twist, the crooks provide a real IRS address and tell the victim to mail the receipt for the payment to the agency.
The scam trades on fear of the big bad IRS, which is why the agency is stressing that it does not ever call a taxpayer without first contacting you by mail, and never demands immediate payment with no opportunity for appeal. The IRS also will not demand just one kind of specific payment – most people, after all, pay their taxes with a check – and the agency does not threaten to call in the local cops, since Treasury agents handle any IRS arrests.
Besides the obvious advice to avoid giving out your financial information over the phone or sending money to strangers, the best defense is to know your own tax situation. If you filed a return last April that was accepted by the IRS, and even got a refund, any tax dispute will be about specific income items or deductions, and the IRS would contact you by mail. If that has not happened, your tax status is not an issue.
If you do think – or know – that you owe back taxes, find out exactly why and try to make a deal with the IRS, known as an “offer in compromise.” Under such an offer, you are allowed to settle your tax bill for less than the full amount owed. However, if the IRS determines that you can afford to pay what you owe, the best you are likely to do is to set up a payment plan. You can get information on both options at www.IRS.gov.
As lucrative as this tax scam is, it is unlikely to go away anytime soon, so make sure your tax situation is under control, and you can hang up on any threatening tax calls or messages.