How to Avoid an IRS Imposter Scams

In March of each year, the IRS releases its list of the most dangerous tax scam known as  "Dirty Dozen." The Treasury Department's Inspector General for Tax Administration, for the period, October 2013 through March 2021, This caused more than 2.5 million reports of scam calls from IRS impersonators, with some 16,000 victims collectively losing more than $82.6 million. This scourge is predicted to double in the next few years and is quickly reaching epidemic propositions. These scams range from phone caller scams, in-person fraud, and, most common of all—IRS imposter email scams. These email scams are typically referred to as phishing. The scammer will typically pose as an IRS representative (or the IRS itself) attempting to obtain sensitive information in these emails. The information desired by these scammers includes Social Security numbers, financial records, and especially bank account information. Once the information has been obtained, these scammers will attempt to access the victim's bank accounts or even steal their identity. It's essential to protect yourself from these IRS imposter scams.  These imposters are most active during December to November, before and during tax season. Use the below tips to become more educated and avoid becoming a victim of these scammers!

Know-How the IRS Communicates

It is essential to understand IRS DOES NOT COMMUNICATE BY EMAIL.  In general, the IRS communicates with a taxpayer via U.S. mail.  In addition to not communicating by email, THE IRS DOES NOT USE SOCIAL MEDIA OR TEXT MESSAGING to communicate information about tax debt or refunds. It is extreme rare for the IRS to call a taxpayer on the phone.  When they do, the IRS agent will always identify themselves and provide their ID number.  THE IRS WILL NEVER USE A WIRE TRANSFER, PREPAID DEBIT CARD, OR GIFT CARD ASK FOR A PAYMENT.

Look at the sender's email address and general writing style

The scenario for most phishing scams involves a con artist pretending to be an IRS representative.  These con artists typically request that the taxpayer provide sensitive information, and the con artist's email is made to look like an official communication from the IRS.  However, if you look with a suspicious eye, you will see tail tell signs that something is not correct.

• Refer to the paragraph above:  THE IRS DOES NOT COMMUNICATE BY EMAIL.
• Check the spelling and grammar: Scammers will often use an email address just one letter off from the correct IRS domain (IRS.gov) or use the domain of another official tax agency. Check to make sure all of the spelling is correct before responding to their request. If there are misspellings or incorrect grammar within the email itself, you should consider this a red flag.
• Look for ".gov": Any email from the IRS should have ".gov" at the end of the sender's email address—not .com, .org, etc.
• Avoid general subject lines: Scammers typically send in mass and will usually use a very generic subject line like "Hello" Since they send in mass, it will rarely list your name in the subject.
• Dangerous and very enticing links: Scammers will create very enticing links in an attempt to get you to click a link containing embedded malware.  The purpose of this malware is to infiltrate your device or install a virus on your computer a virus. Don't click on any links or open any attachments, if an email seems suspicious.

Aggressive communication is a red flag

The scammer will often use very treating language in their communication, telling you all of the bad things that will happen if you do not pay them immediately.  IRS will always inform you of your rights and provide a time period to respond.  If you receive one of these threatening communications, report the scam issue with the IRS.

Contact the IRS directly

If you feel that you have received communication from an IRS imposter, you should verify the communication by contacting your local IRS tax office. It is also helpful to be aware of the most common types of tax scams.

Most Common Types of Tax Scams

Scammer and identity thieves are constantly improving their deceptive methods and technics to steal your tax information or force you to pay a fictitious debt.  The best defense is to become very familiar with the most common types of scams.

Calls from a Fake IRS Phone Number

The most widely used tax scam is the threatening phone call from a scammer identifying themselves as an IRS agent. These scammers bully you into settling a fictional IRS debt by threatening to deploy police or an immigration officer to your home or office. These scammers will commonly request bank draft information or immediately demand payment via wire transfer or prepaid gift card. Unless a case has been assigned to a Revenue Office and after multiple mailed noticed, the IRS rarely contacts taxpayers on the phone. The real IRS will mail a series of correspondence to taxpayers using the United States Postal Service.   The IRS will never;

• Demand payment from a taxpayer without the opportunity to dispute the claims.
• Threaten to deploy police or immigration if you don't pay their on-the-phone demands.
• Ask you to pay by credit or debit card to someone on the phone
• Demand payment by wire transfer or prepaid gift card
• Call you about a tax debt without having sent a series of notices

If someone calls you claiming to be the IRS, ask for their name, title, and ID number. Tell them you will call them back if the debt proves to be legitimate. Call the IRS yourself at 1-800 829-1040 and tell them you want to do a compliance check.  Ask them about any outstanding debts and the nature (from what year and type of debt).   Ask if a Revenue Officer has been assigned to the case.  If one has been assigned, they should give you the name, ID number, and phone number.  See if it matches what the previous caller gave you.  If it does, go through your files to determine if this debt could be correct.  If this all checks out, you likely have a debt that needs to be addressed.  Call the agent back and work it out.  If the debt is not something you feel confident in handling, seek out representation.

IRS Phishing Emails

Much like the fake phone, an IRS phishing email is a tax scam where you receive emails from someone claiming to be associated with the IRS. Remember from the discussion above that the IRS DOES NOT COMMUNICATE BY EMAIL, so you already know this is fake. Their goal these scammer is to get you to click on a link or download a file that often appears very legitimate.  These scammers hope to steal your personal information to commit identity theft or hack your computer to find your banking information.  The scammers will use enticing subjects like the following to cause you to click the link or download a file:

• Claiming a tax refund by clicking a link
• Paying an outstanding tax debt by providing information on a form fill on a website
• Claiming to fixing a problem with a bank account or credit card by giving them your personal information

Remember, the IRS never reaches out by email. It is in your best interested to never opened an attachment or clicked a link in a phishing email.   

Pay your Tax Debt Through a Fake Charity

One of the newest IRS Scammer methods is posing as a charity to solicit a donation that will help the donor avoid paying a tax debt. You have to know that you CANNOT DONATE TO A CHARITY TO AVOID PAYING AN IRS DEBT. Secondly, always use the IRS Exempt Organization Search Tool to confirm an organization is legitimate if you believe an organization is committing a charity scam.

Using an Imposter Tax Preparer

One of the most deceptive new methods is to pose as an uncertified tax preparer.  Verify that any tax preparer you are considering is listed with the IRS as a Register Return Preparer.  This scam is particularly dangerous because you will give them access to your personal information as part of the tax preparation process. By law, anyone paid to prepare or assist in preparing a U.S. federal tax return must possess a valid Preparer Tax Identification Number (PTIN). A paid tax preparer must sign and list their PTIN number on the return. Not signing a return should be a huge red flag.

Soliciting a Tax Shelters for Tax Reduction

These scammers will advertise tax shelter schemes supposedly to reduce your tax burden.  Mostly these Abusive Tax Shelters steal taxpayers' money as part of their illegal activity.  The IRS aggressively pursues prosecution against taxpayers using these Abusive Tax Shelters.

Falsifying Income or Taking Illegitimate Tax Deductions

These fraudsters will present a return offering a refund, and before filing, they will falsify income and create illegitimate deductions to obtain a higher refund.  Once the refund from the larger-than-expected false return hits your account, they will steal the difference for their nefarious purposes.

Ways to Prevent A Tax Scam

There is no way to prevent 100% of all tax scams.  However, there are steps you can take to help prevent them from happening. You can heighten your defenses against these  tax scammers by:

• Hanging up on suspicious tax scam phone calls and ignoring phishing emails that look like they may be a scam.
• Use secure digital storage to maintain your tax documents. Either use a password-protected portable hard drive or keep copies on a secure digital filing cabinet.
• Filing your return as early as possible. Thieves cannot steal a refund you already have.
• Hiring a legitimate tax preparer who is listed with the IRS as a Registered Return Preparer. Obtain their Preparer Tax Identification Number (PTIN) to ensure they are registered with the IRS. For CPAs, you can also contact their  State Board of Accounting to make sure they are qualified
• Use a secure Internet connection. Whenever you are transiting or requesting sensitive information, always avoid using public WiFi, such as  Starbucks or the public library.
• Have a strong password to protect your documents and sensitive information. Avoid retaining your password in an unsecured digital location, where hackers could find them. If you cannot remember your passwords, write them down in a journal and keep that hidden in a place you will remember, such as a password-protected file.  That way, you only have to remember one password.  Make sure that password is a very strong password that no one can retrieve by knowing personal information about you.

What You Should Do If You are a Victim of a Tax Scam?

If you become a victim to one of these tax scams, immediately report it to the IRS. The following  procedures should be use to report a tax scam:

• Allow the IRS  to open an investigation by fill out an IRS Identity Theft Affidavit (Form 14029), providing all the necessary details
• File a police report
• Contact your bank and credit card companies asking them to monitor your accounts by letting them know about the fraudulent activities.
• If you receive a phony refund that has been deposited in your bank account, return it to the IRS immediately.  If you keep it, the IRS will believe that you are part of the fraud.
• Immediately forward any phishing emails to the email address [email protected]
• File a complaint immediate, if you become a victim with the Federal Trade Commission (FTC)

The IRS can move very slowly, especially in cases of identity theft. After you have reported the tax fraud to the IRS, if the scam is causing a significant financial hardship on you, contact the Taxpayer Advocate Office to help resolve your case more quickly.