Imagine this: you're at home on a weekend, minding your own business, maybe getting ready to go shopping...and you get a call of people claiming to represent the IRS who have filed a law suit against you. You owe the IRS over two thousand dollars. The people on the phone tell you their names, badge numbers, and claim that unless you pay at least five hundred dollars right away they will send an officer to your house to arrest you. They speak so fast and with such confidence that you cannot help but believe them. You cannot help but feel sudden fear, overwhelmed as you are in this panicked blitz. What do you do? Do you dare risk hanging up on them to check and see if they're legitimately from the IRS or not?
Yes. You should absolutely do just that. It is highly likely you have encountered a tax scam, just as I did this past weekend; the very first tax scam I ever encountered. The only reason I didn't fall prey to it was because I didn't have the two thousand dollars in my bank account to pay them over the phone, so taken in was I by their con. And while this is embarrassing, I am admitting it to you all today to help you spot the signs of a scam and avoid getting taken advantage of by these predators.
The experience I just described is exactly what happened to me this past Saturday. Even now, almost a month after the tax deadline, these scams are still running - and sound more official than ever. They'll claim they're dredging up past tax returns (mine were as old as 2008-2013). They claim there was an error on your returns resulting in a debt of thousands of dollars. They threaten you with legal action, and it all sounds perfectly legitimate and professional. They give you their badge numbers, their names, tell you that the call is being recorded for legal purposes, and even give you a time window for when the police officer will arrive to arrest you.
And if - like me - you have no experience with such things, it will scare you. But hopefully, this article will serve to educate and inform you of what to do when you get a scary call like this.
Keep these key points below fresh in your mind should you receive a phone call similar to the one I experienced:
· The IRS has a page on what to do if you receive a suspicious call from people claiming to be from the IRS.
· The IRS will never demand an immediate payment, and it will always send you an official bill before attempting to contact you through the phone.
· The IRS will never demand you pay the bill without the opportunity to question and appeal the amount. (See: Our recent blog post about the Taxpayer's Bill of Rights.)
· They will also never require you to use a specific method of payment (mine demanded I pay cash), or ask for your credit or debit card numbers.
· And - very importantly - they will never threaten to bring in local police or other law-enforcement groups to have you arrested for not paying.
If the people calling you demand ANY of those things - this is a scam and you should hang up immediately! And when you hang up, if you have gotten any of their information (their names, fake badge numbers, phone number, etc.), you should head to the Treasury Inspector General for Tax Administration (treasury.gov/tigta) and report the scam via their online form.
The Inspector General will ask you when the incident occurred, if you had any financial loss (and how you paid this impersonator), and how this impersonator contacted you. You will need to enter your information should the Treasury Inspector General need contact you, and you will be given a confirmation case number to refer to. This reporting is very important - because these scams need to stop. And the only way they can is for them to be found out and exposed for what they are.
Educating yourself and making sure you know how the IRS operates, is key to making sure you don't fall prey to these heartless cons and ensuring you keep yourself and your accounts safe this tax season. For my part, I was lucky to have not had my accounts compromised, but if yours are - be sure to keep open communication with your bank, and be sure to inform the Treasury Inspector General of what has occurred. Remember those five key points to ensure your financial safety, and always be on alert.