How to Detect Phone Scams Pretending to be the IRS
An issue I see almost daily in my practice is phone scammers pretending to be the IRS. These scammers usually demand immediate payment or request sensitive financial information from taxpayers, threatening to take action if they don’t comply. They typically threaten actions such as lawsuits, levies, liens, and even criminal prosecution. One scammer went so far as to impersonate an IRS agent by visiting a taxpayer’s house late at night, shining a flashlight in the windows, and demanding surrender. Luckily, that particular taxpayer promptly called the police and was unharmed.
Although the vast majority of taxpayers who receive calls from fake IRS agents immediately hang up the phone, it is a tragic reality that many taxpayers, particularly the elderly, fall prey to these scams. In fact, it is estimated that nearly 6,400 victims have paid over $36.5 million to scammers masquerading as IRS agents since October of 2013, with the average amount of money lost per taxpayer estimated at $5,700. To ensure you don’t fall prey to these scammers, we have put together some general pointers on how the IRS actually works.
The IRS generally contacts taxpayers through the mail.
Our tax code created the IRS to collect taxes. Since our Constitution guarantees due process rights, the IRS is held to strict standards when contacting taxpayers. The IRS almost always contacts taxpayers via mail, although in some cases an agent may contact a taxpayer to schedule an appointment for an audit. The IRS never contacts taxpayers via email, text messages, or social media channels. Some red flags indicating that a phone call is fraudulent are when the caller:
- Demands immediate payment
- Tries to verify your identity by asking questions about personal and financial information
- Asks for credit or debit card information over the phone
- Demands a specific payment method such as a prepaid payment card
Generally speaking, the IRS does not “file a lawsuit” against taxpayers for unpaid taxes.
This is one of the most common threats from phone scammers and it often sounds like something the IRS would or could do. However, the IRS doesn’t actually have the power to “sue” taxpayers. Instead, that function belongs to the U.S. Department of Justice. Plus, if you were subject to a federal lawsuit, there are well-settled procedures that the government is obligated to follow, including written notice.
You have the right to speak with an attorney.
If you are ever suspicious that a phone call is fraudulent, ask the person what their name and badge number are and inform them you wish to speak with your attorney. Right away, you will know if the call is fraudulent. If a legitimate IRS agent is speaking with you, they will provide you with this information and provide a call-back number. If it is not a legitimate IRS agent, they will probably refuse your request or just hang up. If the agent continues to demand payment or other action, hang up immediately.
For more information on fraudulent phone calls and how to report them, please visit the IRS website’s direct link by clicking here.
