Tax season isn't necessarily the highlight of the year for many Americans. It means complying with the increasingly complex federal, state, and local governments, and for many it's a time to hand over your hard-earned money. While lawful, it's far from our favorite thing to do. Adding insult to injury, this time of year, tax scammers are very active and can swindle you into directly giving away your money – without contributing a dime to any taxes you may actually owe. Thinking they've just paid off an outstanding IRS balance, many have come to the harsh reality that they've actually just been robbed blind.

The number one tax scam facing Americans this year is the "urgent IRS phone call." While the scam may seem obvious, it's easy to lose sight of this during the event of a scam. As a result, many fall victim to this scam in particular.

*Since 2013, the IRS has confirmed that close to 3,000 people have paid over $14 million to tax scammers.

The most current scam goes something like this:

You answer a call from an arbitrary number, and are greeted with the unpleasant news from an alleged IRS agent, that you have an outstanding balance with the IRS. The person claiming to be an IRS agent gives you little to no detail regarding how much you owe, and virtually no verification that you owe money to the IRS. Despite this, the "agent" possesses personal information about you that indicates the outstanding balance is legitimate. If you continue to resist payment while on the phone, the “agent” is likely to apply even more pressure by threatening you that local law enforcement will show up and arrest you within hours if you do not pay the money demanded.

Top 6 Ways to Spot a Tax Scam:

1. Phone Calls: The IRS will never call you about taxes owed prior to having a bill mailed to you. If you have not received anything in the mail from the IRS recently, you should discontinue any phone conversation with those posing as IRS agents.

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 internal revenue service.

3. Email Communication: The IRS will never contact you regarding taxes owed by e mail.

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 such as 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 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 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 in 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 scam, immediately report them to the IRS, using the link below.



Co-authored by Joe Seifert, CPA, and Anna Barram.