Being contacted by the IRS is probably one of the scariest things most people can think of, whether it be for an audit or collections. The truth is, it shouldn’t be scary at all. You have rights, and the IRS (Internal Revenue Service) has strict guidelines they must follow. However, scammers have taken advantage of that fear to trick people out of millions of dollars. Here are some things to know to avoid scams.
Spotting the fake
If the correspondence doesn’t come in the mail, it’s probably fake. Since printed documents are easy to forge, call your local IRS office to confirm the authenticity of the letter. Unless you’ve committed serious tax fraud—in which case, you’ve probably committed a lot of other crimes—the IRS will contact you by mail. After that, they may call or start knocking on doors. If the IRS does call, it will be to set up a meeting at an IRS office; they will not request payment over the phone. If an IRS agent contacts you in person, they’re required to present you with two forms of ID: their official IRS Pocket Commission and an HSPD-12 card. They are also required to allow you to call the IRS to verify their identity.
Strange payment requests
Scammers often have strange payment requests. If the person contacting you asks you to send gift card numbers or prepaid debit card information over the phone or through email to pay tax debt, it’s a scam.
Cash is another way scammers try to get paid. While the IRS will accept cash, they will not ask you to send it through the mail, especially not tucked in the pages of a magazine.
The IRS doesn’t take payment directly through credit cards and there is no way to pay them with gift cards. There are third-party processors who will accept credit payments on behalf of the IRS, and those are all listed on the IRS website under the “Pay” tab. Again, anyone who is an IRS official will direct you to verifiable payment methods listed on the IRS website. Any official IRS payment method is traceable and verifiable.
Another common scam is OIC (Offer in Compromise) mills. These organizations promise to help you settle tax debt for fractions of what you owe. The hard part is, these mills make sense to a lot of people who actually have tax debt. They cannot help.
If you are in debt to the IRS, you should retain counsel (contact a lawyer). If there is any reduction in the amount of tax you owe, it will be determined in a discussion between you, your lawyer, and the IRS. No third-party organization can help you for a fee. It simply isn’t how the system works.
Threats are fake
The IRS works for the Department of Treasury. They deal exclusively with the taxes of the American people, be it collecting or refunding or auditing, and any associated enforcement. That is it. If a person claiming to work for the IRS is threatening your immigration status, record the number or email address and report them. Also, the IRS will not show up and arrest you, or have local law enforcement arrest you, without a formal process. They have a strict system of contact and an appeals process before any of that occurs. The IRS only deals with tax issues; immigration status is outside of their jurisdiction.
If you suspect someone is attempting to scam you by pretending to be the IRS, there are a few places you can and should report it. Phone scams can be reported to the Treasury Inspector General for Tax Administration at 800-366-4484 or to their “IRS Impersonation Scam Reporting” web page. You can also go to FTCComplaintAssistant.gov to report a variety of scams. Any IRS-related email or Electronic Federal Tax Payment System scams can be reported to firstname.lastname@example.org.
No matter what, don’t panic and jump to what appears to be a fast solution. There are few things the federal government does quickly. Someone claiming to be from the IRS and demanding immediate reaction on your part should be seen as suspect.