Social Security Number Hustle Scam – In this tax scam, the victim receives a robocall saying that his or her Social Security number has been (or will be) “cancelled” because the taxpayer has not paid overdue taxes. Victims are told that they must return the call immediately to resolve the issue. Upon returning the call, the scammer will ask the victim to confirm his or her Social Security number and for a credit card number to pay the fictitious tax bill. Protect yourself and your loved ones as this scam often affects older taxpayers who may be easily frightened and mislead. Never give out your Social Security number to anyone who contacts you by telephone, and never give out credit card information or send any kind of payment to anyone contacting you by phone. When in doubt, call your local social security office at the number found on https://www.ssa.gov/ or the call the IRS at 800-829-1040.
Bogus Tax Agency Scam – A phony tax agency (e.g., Bureau of Tax Enforcement) sends a letter to the victim demanding payment of fictitious delinquent taxes and threatening a lien on the victim’s property or a levy on the victim’s financial accounts. The letter may reference legitimate tax agencies (such as the IRS) in an attempt to enhance the legitimacy of the fake agency. Don’t be bullied into paying money out of fear. If in doubt and they claim that you owe federal taxes, contact the IRS at 800-829-1040. If the claim is for state taxes, find the contact information online for the state in question, and call them directly. If you need help, call your tax professional who can assist you.
Spoof Taxpayer Advocate Service Scam – In this scam, the victim receives an unsolicited phone call from the scammer who claims to be from the Taxpayer Advocate Service (TAS), which is an actual government agency. The scammers are able to trick the victim’s caller ID so that the call appears to be from the TAS office of the IRS. Once the scammers gain the victim’s confidence, they request personal information, including the victim’s Social Security number or individual taxpayer identification number (ITIN). Never provide your Social Security number or any other personal information to anyone who calls you on the phone. If they are indeed with the IRS, they will have access to that information and do not need to get it from you.
Tax Transcript Malware – Targeting businesses, the scammer sends emails that appear to be from the IRS to employees. The emails contain an attachment described as the victim’s “tax transcript.” When an employee opens the attachment, malware infects the computer of the employee and then spreads to the entire computer system of the business. The malware steals sensitive information from the business and forwards it to the scammer. The tax transcript attachment is a new twist on a well-known phishing scheme where malware known as Emotet poses as an attachment from specific banks and financial institutions. This attack relies on the trust, gullibility, and natural curiosity of the victim to open the attachment. The best defense is to avoid opening email attachments and clicking on email links unless you are certain of the source.
Most tax scams have certain characteristics that reveal their true purpose.
Red flag one is a demand for immediate payment using a specific payment method, such as a credit card, a debit card, a wire transfer, cash, or even gift cards. All payments made for taxes should be made directly to the IRS at the addresses published on the IRS website or through the IRS website at https://www.irs.gov. Always call the IRS at 800-829-1040 to verify that you actually have a balance due before submitting any payment.
Red flag two is when scammers threaten that the local police or other law-enforcement agency will arrest the taxpayer, revoke the taxpayer’s business or driver’s license, cancel the taxpayer’s social security number, or change the taxpayer’s citizenship or immigration status for non-payment of taxes. This extortion attempt relies on the taxpayer’s confusion and lack of knowledge regarding various tax obligations and the authority of the IRS.
Although the IRS can eventually place a legal claim against a taxpayer’s property for non-payment of taxes, the IRS cannot arrest taxpayers for non-payment nor can the IRS revoke licenses or status.
Red flag three is when the demand is immediate and urgent without the opportunity to question or appeal the tax liability. The IRS has several layers of inquiry and appeal built into its tax collection systems. There is never a rush when a legitimate tax issue is first initiated, and the IRS gives taxpayers multiple opportunities to discuss and address the issue.
Red flag four is when the scammers contact the victim via email or telephone. Nearly all IRS correspondence is through the United States Postal Service, including initial taxpayer contacts. Under very limited circumstances, and only after several notices have first been sent through the mail, the IRS may call or visit a taxpayer in-person when the taxpayer has an overdue tax bill, a delinquent tax return, or a delinquent employment tax payment, or when the IRS needs to tour a business as part of a civil or criminal investigation. If the taxpayer receives a suspicious email, the email should be forwarded to firstname.lastname@example.org.