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Impersonating IRS Agents, Scammers Try to Steal your Money
How to protect yourself from criminals claiming to be collecting unpaid taxes
PAUL SPELLA (SOURCE: GETTY IMAGES (3))
In this story
Scam stories • Common tactics • Red flags • Protect yourself • Report scams • Resources
You open a letter or email or receive a call claiming to be from the IRS. It says agents have been trying to reach you about an unpaid tax bill and a warrant is out for your arrest.
Tax scams can be simple: Victims are told they owe taxes and must settle their debt immediately or face arrest.
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Or criminals may weave an elaborate tale: Recent convictions include a case in Arizona where victims were told they won the lottery. Victims were then sent a fake IRS letter threatening to seize their assets if they did not pay taxes immediately. In another case, a criminal impersonated various government agencies, including the IRS, and convinced victims they were suspects in money laundering or drug trafficking schemes. Victims were told that unless they paid immediately, they faced arrest and financial ruin.
Reports of criminals pretending to be government agents has been growing. Victims lost more than $394 million to government impersonation scams in 2023, an uptick of 63 percent from 2022, according to the most recent data from the FBI.
Common IRS impostor scams
“Scammers prey on uncertainty and confusion, so (stay) current on scams that are out there,” urges Terri Steenblock, who works on fraud protection and awareness at the Federation of Tax Administrators, an association for state tax officials.
Here are three common scenarios used by criminals who pose as tax collectors.
- You owe the IRS money. A caller claiming to be from the IRS contacts you about purported unpaid taxes. Calls may get abusive. You are told you will be arrested or taken to court unless you pay immediately. To add pressure on victims, there may be an additional call, this one from the “sheriff” or “police” threatening imminent arrest.
- You have an unclaimed refund. Official-looking letters arrive, some via a delivery service, informing the recipient about an unclaimed refund. To collect the money, the recipient must send photos of a driver’s license and bank information.
- You are owed a tax rebate. But to get it, you must verify your identity by providing a Social Security number and other personal information.
How to know if it's a scam
Here are five red flags that should tip you off that you’re not communicating with the real IRS:
- Contact by phone, email, text or social media. “This is not how the IRS contacts you,” says April Walker, lead manager for tax practice and ethics for the American Institute of Certified Public Accountants. “They’re not going to send you a text and say, ‘Click on this link to pay your tax bill.’ ” The IRS initiates contact through the U.S. Postal Service, Walker says.
- An appearance at your door. The IRS stopped most unannounced in-person visits. “We have the tools we need to successfully collect revenue without adding stress with unannounced visits,” former IRS Commissioner Danny Werfel said when announcing the policy, created in part to thwart scammers, in July 2023.
- Threats of arrest or court summons. Even if you’re scared, remember you have the right to challenge what the IRS says you owe and hire an enrolled agent or a lawyer to represent you, says Jennifer MacMillan, who serves on the board of the National Association of Enrolled Agents (NAEA), an organization of tax specialists licensed by the U.S. Treasury Department. Even if you do owe money, “they are not going to come arrest you (or) demand instant payment,” she says.
- Demands for immediate payment. Although the IRS is in the business of tax compliance, Walker says, it wants to work with you. “If you owe money, they offer installment plans and other solutions,” she says.
- Odd payment methods. The IRS does not ask for payment in gift cards, prepaid debit cards or cryptocurrency.
How to protect yourself
- Hang up immediately. A call might appear legitimate, but criminals can change caller ID so it looks like the call is coming from an actual IRS office. If you’re concerned that you owe money, call the IRS, Walker says. But look up the number yourself, don’t use a number you are given.
“You may be a long time on hold, but it’s the easiest way to resolve it,” MacMillan says. You can create an online account with the IRS to check what you may owe, or if you use an accountant, call them for help, MacMillan says.
- Shut the door. If the IRS wants to see you in person, it will schedule an appointment through the mail, Walker says.
- Avoid opening unsolicited emails. If you do open an email, be careful not to click on any links or attachments. Forward unsolicited emails in which someone claims to be from the IRS or the Treasury Department to phishing@irs.gov.
- Verify notices. If you've set up an online IRS account, you should see a copy of any letter from the agency in your account. IRS customer service can also tell you whether the communication is genuine.
- Consider how you've been asked to pay. Check the IRS site irs.gov/payments for options, instructions and verification that payments are being made to the real agency. The IRS will not ask for money to be paid in gift cards or cryptocurrency.
- Work with a trusted professional. You can also check any claims of taxes or refunds with a tax preparer you've used before or one recommended by close friends or family. If you do owe money, the IRS will work out a payment plan. You also have the right to appeal the amount the agency says you owe.
If you’ve been targeted
- Report calls. If you received a scam IRS call, contact the Treasury Inspector General for Tax Administration (TIGTA) immediately at 800-366-4484 or file a report online.
- Report stolen money. If you’ve had any monetary losses due to an IRS-related scam incident, report it to TIGTA, the FTC and the FBI’s Internet Crime Complaint Center. If you bought gift cards, the FTC urges you to report the companies that issued the cards. Instructions for contacting companies, such as Amazon, can be found here.
- Get help. The trained fraud specialists at the free AARP Fraud Watch Network Helpline, 877-908-3360, can share information on what to do next. The AARP Fraud Watch Network also offers online group support sessions.
More resources
The IRS has a page with consumer scam alerts. It details how the agency contacts consumers.
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