No, That Is Not the I.R.S. Calling
Do you know how the Internal Revenue Service contacts taxpayers to resolve a problem? The
first step is almost always to send a letter through the U.S. Postal Service to the taxpayer.1
It is very rare for the I.R.S. to make the first contact through a call or a personal visit. This
happens in two circumstances: when taxes are notably delinquent or overdue or when the
agency feels an audit or criminal investigation is necessary. Furthermore, the I.R.S. does not
send initial requests for taxpayer information via email or social media.1
Now that you know all of this, you should also know about some of the phone scams being
perpetrated by criminals claiming to be the I.R.S. (or representatives of investment firms).
Scam #1: “You owe back taxes. Pay them immediately, or you will be arrested.” Here,
someone calls you posing as an I.R.S. agent, claiming that you owe thousands of dollars in
federal taxes. If the caller does not reach you in person, a voice mail message conveys the
same threat, urging you to call back quickly.1
Can this terrible (fake) problem be solved? Yes, perhaps with the help of your Social Security
number. Or, maybe with some specific information about your checking account, maybe even
your online banking password. Or, they may tell you that this will all go away if you wire the
money to an account or buy a pre-paid debit card. These are all efforts to steal your money.
This is over-the-phone extortion, plain and simple. The demand for immediate payment gives
it away. The I.R.S. does not call up taxpayers and threaten them with arrest if they cannot pay
back taxes by midnight. The preferred method of notification is to send a bill, with instructions
to pay the amount owed to the U.S. Treasury (never some third party).1
Sometimes the phone number on your caller I.D. may appear to be legitimate because more
sophisticated crooks have found ways to manipulate caller I.D. systems. Asking for a callback
number is not enough. The crook may readily supply you with a number to call, and when you
dial it someone may pick up immediately and claim to be a representative of the I.R.S., but it’s
likely a co-conspirator – someone else assisting in the scam. For reference, the I.R.S. tax help
line for individuals is 1-800-829-1040. Another telltale sign; if you ever call the real I.R.S., you
probably wouldn’t speak to a live person so quickly – hold times can be long.1
Scam #2: “This is a special offer to help seniors manage their investments.” Yes, a special
offer to become your investment advisor, made by a total stranger over the phone. Of course,
this offer of help is under the condition that you provide your user I.D. and password for your
brokerage account or your IRA.2
No matter how polite and sweet the caller seems, this is criminal activity. Licensed financial
services industry professionals do not randomly call senior citizens and ask them for
financial account information and passwords – unless they want to go to jail or end their
careers.
Scam #3: “I made a terrible mistake; you must help me.” In this scam, a caller politely
informs you that the U.S. government is issuing supplemental Social Security payments to
seniors next year. Do you have a bank account? You could enroll in this program by providing
your account information and your Social Security number.
Oh no, wait! The caller now tells you that they’ve made a huge mistake while inputting your
account information – and your account was accidentally credited with a full payment even
though you were not enrolled. The distraught caller will now attempt to convince you that they
will lose their job unless you send over an amount equal to the lump sum they claim was
mistakenly deposited. If you refuse, the caller may have a conversation with a “boss” who
demands that money be withdrawn from your account.
Scam #4: “The I.R.S. accidentally gave you a refund.” In this sophisticated double-cross,
thieves steal your data, then file a phony federal tax return with your information and deposit a
false refund in your bank account. Then, they attempt to convince you to pay them the money,
claiming they are debt collectors working for the I.R.S. or I.R.S. agents.
Should anyone call and try to trap you with one of these scams, hang up. Next, report the
caller ID and/or callback number to the I.R.S. at phishing@irs.gov with the subject line “I.R.S.
Phone Scam.” You can also notify the Department of the Treasury (treasury.gov) and the
Federal Trade Commission (ftccomplaintassistant.gov); list “I.R.S. Telephone Scam” in the
notes.
Regarding scam #4, if you really do receive an erroneous federal (or state) tax refund,
you should notify your tax professional about it as soon as you can and arrange its return. You
may also need to close the involved bank account if you sense you have been victimized.1,3
This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This
information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee
of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is
advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and
may not be relied on for avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment
or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular
investment.
«RepresentativeDisclosure»
Citations.
1 - irs.gov/newsroom/irs-continues-warning-on-impersonation-scams-reminds-people-to-remain-alert-to-other-scams-schemes-this-summer [5/31/18]
2 - money.usnews.com/money/retirement/aging/articles/2018-05-09/10-financial-scams-to-avoid-in-retirement [5/9/18]
3 - forbes.com/sites/kellyphillipserb/2018/02/13/irs-issues-urgent-warning-on-new-tax-refund-scam-and-its-not-what-youd-expect [2/13/18]