Consumers Urged to Remain on Alert for Tax-Related Scams Year-Round

New and emerging schemes involving the tax system claim victims from all across the country on a daily basis

Consumers Urged to Remain on Alert for Tax-Related Scams Year-Round
Image: Pixabay
January 31, 2018

The Internal Revenue Service (IRS) is warning consumers to be on alert for tax-related scams that continue to target unsuspecting taxpayers.

Tax Season and Beyond

Whether during tax season or not—the IRS says that people should remain on alert throughout the year for new and emerging schemes involving the tax system that claim victims from all across the country on a daily basis.

"We continue to urge people to watch out for new and evolving schemes this summer," said IRS Commissioner John Koskinen. "Many of these are variations of a theme, involving fictitious tax bills and demands to pay by purchasing and transferring information involving a gift card or iTunes card. Taxpayers can avoid these and other tricky financial scams by taking a few minutes to review the tell-tale signs of these schemes."

EFTPS Scam

A relatively new scam that is linked to the Electronic Federal Tax Payment System (EFTPS) has been reported nationwide. In this ruse, con artists call to demand immediate tax payment. The caller claims to be from the IRS and says that two certified letters mailed to the taxpayer were returned as undeliverable.

The scammer then threatens arrest if a payment is not made immediately using a specific prepaid debit card. Victims are told that the debit card is linked to the EFTPS—when in reality it is controlled entirely by the scammer. Victims are warned not to talk to their tax preparer, attorney, or the local IRS office until after the payment is made.

Robocall Messages

The IRS does not call and leave prerecorded, urgent messages asking for a call back. In this tactic, scammers tell victims that if they do not call back, a warrant will be issued for their arrest. Those who do respond are told they must make immediate payment either by a specific prepaid debit card or by wire transfer.

Private Debt Collection Scams

The IRS has sent letters to a relatively small group of taxpayers whose overdue federal tax accounts are being assigned to one of four private-sector collection agencies. Taxpayers should be on the lookout for scammers posing as private collection firms. The IRS-authorized firms will only be calling about a tax debt the person has had—and has been aware of—for years. The IRS would have previously contacted taxpayers about their tax debt.

Scams Targeting People with Limited English Proficiency

Taxpayers with limited English proficiency have been recent targets of phone scams and email phishing schemes that continue to occur across the country. Con artists often approach victims in their native language, threaten them with deportation, police arrest and license revocation among other things. They tell their victims they owe the IRS money and must pay it promptly through a preloaded debit card, gift card or wire transfer. They may also leave "urgent" callback requests through robocalls or via a phishing email.

Remember, the IRS (and its authorized private collection agencies) will NEVER:

  • Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card, or wire transfer. The IRS does not use these methods for tax payments. Generally, the IRS will first mail a bill to any taxpayer who owes taxes. All tax payments should only be made payable to the U.S. Treasury and checks should never be made payable to third parties.
  • Threaten to immediately bring in local police or other law-enforcement groups to have the taxpayer arrested for not paying.
  • Demand that taxes be paid without giving the taxpayer the opportunity to question or appeal the amount owed.
  • Ask for credit or debit card numbers over the phone.

Special Circumstances

The IRS initiates most contacts with taxpaers through physical mail delivered by the United States Postal Service (USPS). However, there are some special circumstances in which the IRS will call or come to a home or business, such as: 1) when a taxpayer has an overdue tax bill, 2) to secure a delinquent tax return or a delinquent employment tax payment, or 3) to tour a business as part of an audit or during criminal investigations.

Even in these cases, however, taxpayers will generally first receive several letters (called "notices") from the IRS in the mail.

Report Suspected Scams

If you believe that you've been the target of a tax-related scam, contact the Treasury Inspector General for Tax Administration to report the call. Use their IRS Impersonation Scam Reporting web page. Alternatively, call 800-366-4484. The scam can also be reported to the Federal Trade Commission (FTC).