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It’s Tax Scam Season!

Academy Awards season is less than a month away, but I almost got taken in by an Oscar-level performance just by checking my voicemail. The caller ID read “IRS.” Right next to it was a little Post-It reminder I’d made for myself that said, “IRS never calls about tax returns.”

Even so, listening to the message gave me flop-sweat.

“This is the IRS calling about an extremely urgent and time sensitive matter. We have found fraud and misconduct in your tax filings. You are liable for immediate repayment plus penalties and interest. If you do not respond immediately, we are authorized to take payment directly from your bank accounts, garnish your wages and take liens against personal property and you will be criminally liable.” The caller told me to retrun the call and left a barely comprehensible name and badge number.

IRS Impersonation Scams 2017

Phone scams like this spike at tax time, according to the IRS, which recently awarded this version top billing in its annual “Dirty Dozen” list of tax scams for the 2017 filing season. To date, more than 1.8 million people have reported an impersonation call to the Treasury Inspector General for Tax Administration, or TIGTA, and this one phone scam has swindled more than 10,000 people out of some $54 million since October 2013.

Here’s how it works:

  • Scammers alter Caller ID numbers to read “IRS” or another agency
  • They use IRS employee titles and fake badge numbers to appear legitimate
  • They often use the victim’s name, address or other personal information to make the call sound official
  • After the threats, if you picked up the call they offer an “expedited” payment system to remedy the situation immediately  (a gift card, cash card, credit card, or even iTunes payment system).
  • Some scam artists ask for more personal identification to “confirm” they have the right party, thus setting the stage for more extreme identity theft.

Whether they’re computer-generated or not, these calls are compelling because they play to our insecurities about mistakes in our tax returns and threaten drastic and immediate consequences for ignoring the warning. It works. Even though I knew the call was a scam, before I finally deleted the “IRS” number on my caller ID, I had the phone in my hand for a few minutes as I wondered what to do.

Remember: The IRS will never initiate contact with a taxpayer by phone.

How to protect yourself from IRS Impersonation Scam callers
  • Use Caller ID. Don’t answer calls from numbers you’re not familiar with.
  • To reduce the chances of a scam call, register your phone number with Nomorobo, a free service that uses call forwarding to check your caller’s number against their database of scammers’ numbers and to block scam calls
  • If you do pick up, don’t give any personal information. Hang up immediately. Don’t return voicemails.
  • Contact TIGTA to report the call. Use their IRS Impersonation Scam Reporting web page or call 800-366-4484.
  • Report the call to the Federal Trade Commission. Put “IRS Telephone Scam” in the notes.
  • Check your credit reports for unusual activity. If you think your information has been compromised, contact the IRS at 800-908-4490.

IRS Phishing Scams 2017

Also on the IRS’s Dirty Dozen list is a “phishing” scheme that spiked during the 2016 tax season and are evolving in 2017. In this scheme, the scammer hacks an individual’s or organization’s email account—usually the account of a tax advisor, payroll manager, IRS official or other trusted entity—and uses the hacked account to send emails to the account’s contacts. The sent email link to a fake website that requires you to log in and provide personal financial information.

“Taxpayers should avoid opening surprise emails or clicking on web links claiming to be from the IRS. Don’t be fooled by unexpected emails about big refunds, tax bills or requesting personal information. That’s not how the IRS communicates with taxpayers,” IRS Commissioner John Koskinen warns in a February 1 alert.

A new type of scam—a variant of the IRS Impersonation Scam—is striking HR directors and payroll managers, who receive emails from “the IRS” asking for a list of all employees and their W-2’s.

If you do receive a suspect email, forward it to phishing@Irs.gov.

The Bottom Line

The IRS generally contacts people by mail, not by phone, and will never insist on payment by money order, gift card or wire transfer. It will never threaten to immediately bring in local police, or ask for credit or debit card numbers over the phone.

I guess I’ll need a bigger Post-It note.  

Read more about tax scams and stay informed at IRS.gov

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