Back in the day, the IRS’ list of the Dirty Dozen tax scams were commonly used scams to get out of paying taxes, like writing worthless checks to overpay taxes so the IRS would send a refund, or the rumor that African-Americans or Native Americans were entitled to a tax credit related to reparations. Nowadays, the IRS’ Dirty Dozen is focused on thieves trying to scam YOU out of your hard-earned money. How the times have changed.
Phishing emails, fake phone calls from the IRS, identity theft, erroneous refunds, fake charities, social engineering schemes to get identity information from tax preparers…the list goes on and on.
I can’t possibly say this enough: The IRS will not call to demand immediate payment using a specific method, such as a prepaid debit card, gift card, or wire transfer. Seriously, iTunes gift cards are not currency. The IRS will not send the police to your house or call U.S. Immigration and Customs Enforcement to have you deported. And of course, the IRS will not initiate contact with you by email, text message or via social media channels.
The IRS is old school. It initiates most contacts through regular mail delivered by the United States Postal Service. After you file, if you owe, the IRS will send you a letter indicating you have a balance due. The letter will also explain whether they made any changes to your tax return. The letter will also have a specific date in which you need to reply by, and they will also provide you the right to appeal the amount they say you owe.
That’s how it starts. The IRS generates thousands of letters each year that are generally painless and of little consequence. However, if you ignore an IRS letter, as you might expect, subsequent letters will become more aggressive and difficult to deal with. If ignored long enough, you may end up in tax court to argue your case. For seriously delinquent taxpayers, the IRS has plenty of reach. The IRS can garnish wages, issue a tax levy and file a notice of federal Tax Lien. In April 2017, the IRS began turning over seriously delinquent taxpayers to a private collection agency. Before one of these agencies call you, you will have heard from the IRS first in the form of a letter notifying you that your account has been turned over. This letter will contain a unique identifier that will allow taxpayers to verify that the debt collector is legitimate. In February 2018, the IRS began sending the State Department certifications of unpaid tax debt. The State Department generally will not issue a passport and may even revoke your current passport after receiving certification from the IRS.
You can ignore most fraud attempts. Delete the emails. Hang up on threatening calls. Don’t believe someone who claims they can give you a receipt for a charitable contribution dated in the prior year. However, if you receive a refund before you file, or are unable to e-file because a tax return has already been filed with your Social Security number, you must file a paper return with Form 14039, Identity Theft Affidavit, to indicate that you were a victim. The IRS has an Identity Theft Victim Assistance (IDTVA) organization staffed with employees who have specialized training that will handle your case.
You should file an identity theft report with your local police and report the stolen identity to the three major credit reporting agencies, your bank and other financial institutions to minimize any damage from the identity theft.
If you have questions on a communication claiming to be from the IRS, the experts at Henssler Financial will be glad to help:
- Experts Request Form
- Email: experts@henssler.com
- Phone: 770-429-9166.
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