Busy season is just warming up, and so are tax scammers. People are just starting to think about filing their taxes again, and criminals know Uncle Sam is on their mind. They are using this acute awareness to slip in and try to look credible. Sometimes, they do a great job, especially to the untrained eye. One of the best things you can do for your clients is to be aware of these type of scams.
Many scammers will try to infiltrate with a simple phone call. First of all, it will likely be an audio recording with the following message or something similar.
"This is agent 4512. The nature and purpose of this call is regarding enforcement action which has been executed by the US Treasury Department regarding tax fraud against your name. Ignoring this will be an intentional attempt to avoid an initial appearance before the magistrate judge or grand jury for a federal criminal offense. So before this matter goes to Federal Claims Court House or before you get arrested, kindly call us back on our number. (202-381-2902 is a common one, but they will switch it up) Hope to hear from you soon before the charges are pressed against you. Thank you."
While this can easily be uncovered as a scam if you are well versed in tax protocol and know the practices of the IRS, the real targets of this scam are new taxpayers and the elderly. These criminals are looking to instill enough fear to get people to call back. Once they have their victims on the phone, they will try one of two things. Most likely in this situation, they will just try to get money. They will tell people to wire them money via a pre-paid card or credit card. Worse yet, they will say a refund is due to try to get all the information they need to steal the victim's identity.
The flags here are pretty glaring, but again the aim of these scammers is to slip past the untrained ear and eye. The IRS will always contact via mail first. The IRS will never lead with threats of arrest or court. The IRS will never ask you to pay fees or taxes over the phone to defer arrest. The IRS will never ask for payment with any pre-paid card.* The biggest thing to remember is that if you are surprised to be hearing from the IRS, it probably isn't the IRS.
Phishing with emails
Again, the IRS initiates communication via mail. They will rarely email taxpayers, so any email saying it is coming from the IRS should be scrutinized. The scammers here will usually try to have emails or links that look official. The real IRS websites begin with www.IRS.gov but good scammers will come up with "one-off" URLs and emails that at first glance look like the real thing.**
We'll cut to the chase on this one. These are tax preparers with ulterior motives. The first thing you should do if there is any question is to ask for the IRS preparer tax identification number or PTIN. All real tax preparers must have this. They always sign returns and include this number. Another red flag to look out for is if the preparer insists on mailing in the victims return. Almost all returns can be e-filed, so someone insisting on mailing it in is likely trying to collect fees from you as well as taking your return money.
These preparers bank on getting away with being sketchy. They will want to meet their victims at home or set up shop in temporary storefronts. Common practice is to use flyers promising unrealistic returns or claiming to have a secret to getting a more larger return. If it sounds too good to be true, it probably is.
*The IRS can be reached directly at 800-829-1040 where an actual IRS agent can tell if you have unpaid taxes or are due a refund. If you are sure a scam was attempted against you or a client you can report it to the Treasury Inspector General for Tax Administration at 800-366-4484.
**If you receive an unsolicited email that appears to be from the IRS or a related agency, you can report it by sending it to phishing@IRS.gov.