Don't Be Fooled!
April Fool's Day seems the appropriate time to highlight what's become a near daily mantra: beware of tax-related scams and schemes. Unfortunately, these warnings continue because the sophistication of the scammers is exploding. No longer is it merely the naive who are being sucked in by these scams. While many artless tactics remain (if you just wire this money to Nigeria by Friday...), the emerging scams come wrapped in a cloak of credibility. It's often difficult for even the wary to separate fact from fiction in this new age.
For example, IRS has recently sent out many Identity theft letters (Letter 12 C, Letter 4883C and Letter 5071C). Practitioners are left to wonder, “Are these real or a sophisticated phishing scheme?” In this case, the letters have been real, but the questions are valid. They are ones each of us must ask. The fact is that IRS does sometimes initiate cold calls. An agent can just show up at your door. But that doesn’t mean we have to take the person at their word.
We all must up our dose of skepticism, even if it’s already healthy. The new phishing schemes target preparers, as well as taxpayers. Be very suspicious of unsolicited phone calls or emails saying they are from the IRS. The caller ID can say “Internal Revenue Service,” and the email can bear the return address and the perfect IRS logo, but that doesn’t make the communication valid. Ask questions, take down information, and never give personal information of any kind over the telephone or through an email link unless you’ve initiated the interaction. It may be cumbersome to add an extra verification step, but if the email or the phone call is legitimate, the IRS will be glad to accommodate your caution. It’s better to be safe than sorry. The IRS, which has a lot of helpful information on its website, has stated:
The real IRS will not:
- Initiate contact with you by phone, email, text or social media to ask for your personal or financial information.
- Call you and demand immediate payment. The IRS will not call about taxes you owe without first mailing you a bill.
- Require that you pay your taxes a certain way. For example, telling you to pay with a prepaid debit card.
If you have questions, the IRS says:
- Contact the Treasury Inspector General for Tax Administration. Use TIGTA’s “IRS Impersonation Scam Reporting” web page to report the incident.
- You should also report it to the Federal Trade Commission. Use the “FTC Complaint Assistant” on FTC.gov. Please add "IRS Telephone Scam" to the comments of your report.
Here at CALT, Kristy Maitre, who posted a new column today about identity theft, well understands internal IRS procedures after a 27-year career with the agency. Feel free to call us here if you are concerned that you are being targeted by a scammer. This contact also helps us to be able to spread the word about new tactics to others.
It's likely we haven't even begun to see the extent of what bad actors can do to scam people out of their money. The intricacy of these schemes will only continue to increase. Educating ourselves and remaining skeptical are the best ways to avoid getting fooled.
Other helpful resources:
The Center for Agricultural Law and Taxation does not provide legal advice. Any information provided on this website is not intended to be a substitute for legal services from a competent professional. The Center's work is supported by fee-based seminars and generous private gifts. Any opinions, findings, conclusions or recommendations expressed in the material contained on this website do not necessarily reflect the views of Iowa State University.