Don’t Get Scammed By Someone Pretending to Be from the IRS
September 27, 2018
The Bottom Line looks at some of the common IRS scams out there, who the bad actors target, what you can do to protect yourself, and what you should do if you fall victim to one of these scammers.
DP:I read in the New York Times that over the past four years, more than 15,000 people in the U.S. lost hundreds of millions of dollars to scammers posing as IRS representatives, and 50,000 plus people had their personal data misused.
TS: Oh yeah. It's actually a staggering amount of people that fall victim to these scams. These scams are extremely complex, and those performing the scams have this really down to a science.
DP:What forms do these scams take?
TS: I put together a list of many different forms that coincide with this or something that could happen. (If you have the opportunity, go to the IRS website and they have a very detailed list under tax and scams, consumer alerts.) But I'll just read them to everyone here. So the big one is phone calls from impersonators pretending to be IRS agents looking for money on tax bills that are nonexistent. These scams are actually very complex, and the criminals are using fake phone numbers to make them look real when calling. I've received one of those calls along with my clients, family, friends and business associates. They are very convincing on the phone and know your name from public records. I've read reports that thieves are even using VRS, which is the video relay services, to scam deaf and hard of hearing individuals as well. So the big takeaway is that the IRS will actually never call you; communications from the IRS are always by mail.
DP: As I understand it, there are some of these phone calls that are very threatening or very ominous, like if you don't send us a money order within the next three days, the marshal will come to your house.
TS:Yes, exactly. They will come knock on your door. It’s totally bogus. If you get a phone call from the IRS, just hang up the phone. Another thing that comes to mind is email scams, which are just as huge as phone call scams. I got one of those as well saying that you owe the IRS money or you are due a refund if you provide additional information—usually banking information. Do not even open up an email from them; immediately delete the email. This is solely for fishing for information, and I cannot say this enough, communications from the IRS are always by mail. You will never receive an email or a phone call from the IRS. This is more phone-scam related, but always be mindful of scams around disasters. Criminals prey on people's generosity, so be careful when giving an organization your information. We've had a lot of flooding going on, so people are going to just try to milk off of people's generosity's. Another thing is fraudulent returns can be filed on behalf of taxpayers. The IRS has gotten better at picking up on fraudulent returns that are filed. The service has issued PIN numbers to people who are victims of identity theft. You would know if you were one, you'd get a letter in the mail every year with a different number on it. The last one, and this is probably the most scariest of all of them, is scammers will actually sometimes visit victims in person. If an actual IRS representative visits you, he or she will always provide two forms of official credentials called pocket commission and HSPD 12 cards, which are federal ID cards. You have the right to see those credentials and verify information on their ID cards. An agent will provide you with dedicated IRS phone numbers to verify the information. If the person visiting you does not give you this information, they are not the IRS and you should immediately contact local law enforcement.
DP: I'm assuming that an IRS agent is not going to show up unannounced at your door. There will be scheduling.
TS: First, they'll mail you a letter. You will actually have a process in place where someone just doesn’t show up on your doorstep. That's not going happen. And I encourage our listeners to just look at the IRS website detailing what the IRS is and is not allowed to do. You always have the right as a taxpayer to know what is there. So use the resources that are actually online to check that out.
DP: Who generally are the victims of these scams?
TS:Sad to say, but it's really the elderly and also students, believe it or not. The elderly may get a phone call and freak out right away. And students may just not know the information that they shouldn't be giving. Scammers will often do everything in their power to intimidate the person.
DP:I also read that these scammers will go after people who struggle with the English language or who are newer citizens.
TS:Absolutely. Someone who doesn't have a command of the English language is an easy target because they just don't know the rules.
DP: What tips can you give our listeners on how they can protect themselves?
TS:These scams are starting to get more sophisticated, and they are actually leaving messages. Just ignore the message and do not call them back. A lot of the times they'll say something like, you owe money to us and you have two days to pay or we're going to come and arrest you. Ignore it; delete it. If you happen to answer the phone, do not verify who you are with the person talking. Sometimes they just want to verify who you are so they can record your voice so that they can make fraudulent purchases. So they'll record your voice and then they'll just make other purchases with your information. You know, if you do receive a call and they do leave a voice message and you are not sure what to do next, honestly, contact your accountant. You are not alone, because your accountant will be very familiar with these scams. Talk it through with him or her.
DP: Let's say if, unfortunately, you fall victim to one of these scams, what should you do?
TS: The first thing you want to do is if you received threatening calls and paid the scammer, then tell the police and the federal trade commission right away. If you think you might be a victim of tax ID theft, call the IRS Identity for Protection Specialized Unit. If you received the letter from the IRS that two or more returns had been filed in your name and you did not file them, call the phone number on the letter immediately. You will also want to inform your accountant of this issue so that they can help you with the next steps. The common theme is the IRS will not initiate dialogue via email or a phone call, and your accountant can be the best resource for you with these scams.
DP: Well that's some great information on a troubling trend. Let's lighten the mood a little. Give us one of your New Jersey Historical Society Fund facts.
TS:You can thank New Jersey for discovering dinosaurs. Modern paleontology, which is the science of studying dinosaur fossils, began in about the 1850s after the discovery of the first virtually complete dinosaur skeleton in Haddonfield. So the Hadrosaurus Foulkii is the official New Jersey state dinosaur.
DP:Well, who knew? Thanks again, Tim, for this valuable information.TS:No problem.
DP:And thank you for listening to The Bottom Line as part of the EisnerAmper podcast series. If you have any questions or there's a topic you'd like us to cover, email as a email@example.com may be eligible to win a prize! Visit eisneramper.com for more information on this and a host of other topics, and join us for our next EisnerAmper podcast when we get down to business.