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Top 6 Ways to Spot a Tax Scam

January 12, 2016 | By | No Comments

Phone-Scam2The start of 2016 means New Year’s resolutions, exciting new beginnings, fresh starts, and…the approach of tax season. Unfortunately, the onset of this season also provides criminals with the opportunity to take advantage of taxpayers by committing IRS fraud. According to The Oregonian*, IRS scams are a “fraudster favorite”, citing the Better Business Bureau statistic that IRS scams were the number 1 scam in Oregon and the United States in 2015 .
In an effort to help you steer clear of these scams, we’ve identified some red flags to watch out for over the course of the next few months. Check out the following 6 tips that may help you avoid becoming the victim of IRS fraud:

Top 6 Ways to Spot a Tax Scam:

1. Phone Calls: The IRS will never call you about taxes owed prior to mailing a bill to you. If you have not received anything in the mail from the IRS recently, you should discontinue any phone conversation with someone posing as an IRS agent. However, it is important to note that the IRS may attempt to reach you by phone if previous communication attempts by mail have gone unanswered.

2. Immediate Payment: The IRS will never call you to demand an immediate payment over the phone. Payment “demand” will come in the form of a letter from the IRS.

3. Email Communication: The IRS will never contact you via email regarding taxes owed.

4. Phone Payments: The IRS will never ask for credit or debit card numbers over the phone.

5. Limited Payment Options: The IRS will never require you to use a specific payment method for taxes (for example, the IRS will never specifically request that you pay with a prepaid debit card). The IRS accepts cash, check, debit, or credit card payments.

6. Threats: Lastly, the IRS will never threaten to bring in local law -enforcement groups to have taxpayers arrested for not making tax payments. The IRS does not use threats or scare tactics to obtain tax payments.
What to do if you think you are being scammed:

Hang up immediately. Once you recognize that you’re being targeted by scammers, it’s important to refrain from giving out any information, and ultimately you should terminate all communication. Next, quickly audit your personal information: banking, email accounts, etc. At this point, there have not been reports of cyber fraud that correlate to this IRS phone scam. However to take extra precaution, ensure your assets and personal information have not been tampered with in any way.

What actually happens if you have an outstanding IRS balance?
The IRS sends any and all notifications in writing. The IRS’ standard protocol for outstanding balances will not at any time be communicated via phone. Therefore, a quick way to detect a scam, is if anyone calls you claiming to be from the IRS, rather than sending you a written notification in the mail.

What if you are not sure if you have an unpaid tax debt?
Contact your Delap LLP tax professional and they have the ability to provide you with a phone number you can call to ensure that you are actually speaking with a tax authority who can then provide you with more information about your account. Delap LLP has the ability to assist you by making inquiries on your behalf to the federal, state, and local governments to determine if you have unsatisfied tax debts. When in doubt, contact your tax professional before giving away any money or personal information.

What if you have been taken advantage of by IRS scammers?
“If you have been the victim of a tax scammer, immediately report them to the IRS, using the link below.”If you have been the victim of a tax scam, immediately report it to the IRS, using the link below.
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Tax-Scams-How-to-Report-Them

References:
*http://www.oregonlive.com/window-shop/index.ssf/2016/01/irs_scam.html
http://money.cnn.com/2015/01/22/pf/taxes/irs-tax-scams/

Additional Resources:
http://www.theblaze.com/stories/2015/01/23/watch-woman-gives-irs-scammers-a-taste-of-their-own-medicine/
http://www.thefiscaltimes.com/2015/01/22/IRS-Tax-Scam-Can-Rob-You-Blind
http://www.treasury.gov/tigta/contact_report_scam.shtml

*Co-authored by Joe Seifert and Kevin Blada