With daily changes to tax deadlines and the ever-changing landscape of tax season 2020, it’s more important than ever to familiarize yourself with common tax scams and understand what the IRS will and will not do, to avoid tax scams. Unfortunately when there’s money involved, scam artists come out of the woodwork so it’s important to recognize them and respond appropriately.
Calls from IRS impersonators. Fraudsters impersonating IRS employees call or leave a message, typically using fake names and phony identification badge numbers and often altering the caller ID to make it look like a legitimate IRS number. They tell victims that they owe money to the IRS and threaten them with arrest, suspension of business or driver’s licenses, or even deportation unless they pay promptly using gift cards, prepaid debit cards or wire transfers.
Phishing. Fraudsters send fake emails, designed to look like official communications from the IRS, tax software companies, or even victims’ tax advisors, in an effort to gain access to victims’ financial information or trick them into downloading malware that allows access to their computers. These emails often contain links to bogus websites that mirror the official IRS site and ask victims to “update your IRS e-file immediately.” Fraudsters use this information to file false income tax returns or engage in other identity theft schemes.
Property lien scam. With this fraud type, a thief sends a letter from a nonexistent agency asserting that the victim owes overdue taxes and threatening an IRS lien or levy on the victim’s property. Typically the fake agency has a legitimate-sounding name, like Bureau of Tax Enforcement.
These are just a few examples of the hundreds of tax-related scams the IRS sees on a regular basis. Fraudsters are continually developing new, more sophisticated scams as well as variations of tried and true schemes. So it’s important to be on high alert whenever you receive communications that purport to be from the IRS, a state or local tax authority or a collection agency working on their behalf.
Things to remember
Tax scams can be complex and widely varied, but they’re easy to avoid if you keep in mind what the IRS will — and, more important, will not — do. The IRS will not initiate contact about a tax matter by phone, email or in person, without first sending you a bill or notice by regular mail delivered by the U.S. Postal Service. There may be special circumstances — such as an overdue tax bill, delinquent return, audit or criminal investigation — that prompt a visit from an IRS representative. But these visits are almost always preceded by a series of notices in the mail.
In addition, the IRS won’t:
- Demand that you pay taxes immediately without an opportunity to question or appeal the amount they say you owe,
- Demand payment using a specific method, such as a prepaid debit card, gift card or wire transfer,
- Threaten you with arrest for nonpayment of taxes, or
- Threaten you with deportation or revocation of a driver’s or business license.
Where to turn
If you receive suspicious communications, contact your tax advisor. In addition, if you receive a suspected phone scam, consider reporting it to the Federal Trade Commission using the FTC Complaint Assistant at FTC.gov. You can forward suspected phishing emails to ">, and report IRS impersonation scams to the Treasury Inspector General for Tax Administration at treasury.gov/tigta.
This material is generic in nature. Before relying on the material in any important matter, users should note date of publication and carefully evaluate its accuracy, currency, completeness, and relevance for their purposes, and should obtain any appropriate professional advice relevant to their particular circumstances.