The caller ID may say IRS, but you shouldn’t assume it’s a government agent you’re speaking with on the phone. It could be a fraudster hoping to intimidate you into providing sensitive information or making a payment on a tax bill that doesn’t exist. Common IRS scams include demanding Social Security numbers or insisting on gift card payments. Failure to comply could result in threats that law enforcement is on its way.
These scammers aren’t only on the phone either. They may be emailing or texting potential victims as well.
“What we’ve seen lately is a fairly significant increase in fraudulent emails that appear to be coming from the IRS,” says Brett Hansen, vice president with Dell Data Security.
Watch out for these five red flags to avoid being the victim of an IRS tax scam.
[See: 10 Ways to Protect Yourself From Online Fraud.]
1. An email, phone call or text claiming to be the IRS. When it comes to contacting taxpayers, the IRS will almost always use the U.S. Postal Service first. Trevor Buxton, fraud awareness and communications manager for PNC Bank, says he won’t answer the phone if his caller ID shows “IRS” because he knows the agency doesn’t initiate contact that way.
The problem is some people don’t have the self-discipline to ignore calls and emails, and scammers are counting on that. “They are going to prey on human curiosity,” Hansen says. Impersonators hope they can get people to pick up the phone, open an email or click on an attachment because they want to know what’s being said. Then, they can use manipulation and intimidation tactics, such as threatening police action, to get the information or payment they want. Or in the case of email attachments, fraudsters can prompt taxpayers to download malicious software onto a computer to harvest sensitive data.
To avoid getting caught in this trap, don’t answer the phone if you don’t know the caller. As for emails supposedly from the IRS, Hansen advises immediately deleting the message and moving on.
2. Poor grammar or awkward sentence structure. If you do find yourself on the phone or reading an email from someone who claims to be an IRS agent, poor English is another giveaway of a scam. Some IRS scams are based outside the country, and poor grammar, multiple typos or unusual wording is a red flag that the message or email is not an official IRS communication.
“The best thing to do is simply ignore it,” Buxton says. “Don’t engage with these people in any form.” If you need reassurance that the call or email is fake, you can contact the IRS directly to confirm the message is not from the agency.
[See: Answers to 7 Burning Tax Questions.]
3. Threats that law enforcement will be called. Scammers use the IRS’ intimidating reputation to their benefit. “I think people understand the IRS is very powerful,” says David Shuster, principal at accounting firm Friedman LLP and a member of its Tax Controversy Services Group. “People fear the IRS.”
Because of that fear, people may believe an IRS impersonator when he or she says the police or immigration officers will be sent to make an arrest if payment isn’t made over the phone. However, security experts and the IRS say this is a classic sign of a scam. If you have an outstanding tax bill, that would be a civil matter, not a criminal one, and not something the police would be called in to handle.
4. Requests for a payment via gift card, prepaid card or wire transfer. Another sure sign of a scam is a request to purchase prepaid cards or gift cards and use those to make a tax payment. The same goes for demands to send a wire transfer. “These are bogus. Period,” Buxton says. “There’s no question about it.”
Even if you get a collection call from the IRS, the agency doesn’t demand immediate payment. It also can’t dictate how you pay the bill. Even if it could, Buxton says it would make no sense for the government to want to be paid with gift cards to the iTunes store or another retailer.
5. An unexpected direct deposit in your bank account. A newer IRS scam involves taxpayers receiving an unexpected direct deposit from the Treasury Department. “If all of a sudden you get a deposit, you have to be suspicious,” Shuster says.
If the deposit is followed by a contact from a supposed IRS agent requesting bank information or the return of the money, taxpayers can be assured they are the target of a scam. It could also be a sign that a fraudulent tax return has been filed in the taxpayer’s name. Shuster says if you get a refund you’re not expecting, contact the IRS right away. You can also contact your financial institution to have the deposit returned to the government.
That advice applies to anyone who isn’t sure whether an email or call from someone claiming to be an IRS agent is legitimate. Contact the IRS directly if you think you might owe money and don’t give a payment of any kind over the phone to someone who calls you.
[See: 7 Most-Missed Tax Deductions and Credits.]
While experts say the best advice is to simply ignore IRS scams, you can also report them. The Treasury Inspector General for Tax Administration has an IRS Impersonation Scam Reporting form on its website for that purpose. If you’ve lost money to a scammer, you may also want to file a report with your local police agency.
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5 Signs of an IRS Tax Scam originally appeared on usnews.com
