An IRS agent calls to say you owe back taxes and must pay them today. You can’t mail a check, they say, or arrange for any payment method other than an immediate one. A wire transfer or prepaid debit card would be acceptable. And if you can’t help them resolve the issue immediately, armed marshals are standing by to arrest you.
This is a typical IRS imposter scam that thousands of citizens succumb to each year. In 2020, consumers reported 498,000 imposter scams to the Federal Trade Commission, totaling $1.2 billion in losses. Nearly one-third of the scams involved a criminal posing as a government employee, such as an IRS agent.
IRS imposters will typically call and say they’re agents with the Internal Revenue Service. Such an official-sounding title often lends them instant credibility and can instill fear in the person on the other end of the call. The scammer will then create a false sense of urgency in an attempt to further throw the victim off their game.
An IRS imposter will often say you owe back taxes but might also say there’s a problem with your tax return. Some will go so far as to create a nonexistent tax (such as a “federal student tax”) that they’ll say you failed to pay.
After describing the problem, IRS imposters will almost always request immediate payment to remedy it. They’ll want a wire transfer, prepaid debit card, gift card, or cashier’s check. When faced with that request, you need to pay attention. Any demand for payment in the form of a gift card, wire transfer, prepaid debit card, or cash is a sure sign of a scam. Fraudsters prefer these payment methods because they’re hard to reverse and often difficult to track.
With a gift card or prepaid debit card, scammers will ask for the card number and PIN. With that information, they’ll have immediate access to the money on the card.
According to the FTC, anyone requesting payment by gift card is ALWAYS a scammer. In addition, the IRS would never demand that you use a certain payment method with them.
The IRS would also never revoke your driver’s license, immigration status, or business license, as some scammers have threatened to do. Be especially aware of threats! The IRS would never threaten to have you arrested. They would never even demand that you pay taxes without giving you a chance to question the amount owed.
Ring-a-ding-don’t!
The telephone has historically been the scammer’s weapon of choice. Most victims of IRS imposters said they were contacted by phone.
The scam might come to you as a robocall. The caller will provide a number for you to call back to fix a problem with your taxes. Don’t assume a call is legitimate because it appears to be from the IRS. Fraudsters can trick caller ID to make their call appear to be from the IRS.
In reality, the IRS will always contact you by mail first before ever calling you about your taxes. The agency will only contact you by phone after you’ve received several written notices from them.
Beware of IRS email and text messages too
Another common ruse used by IRS imposters is to send an email or text message asking you to confirm some personal information. There will be a button or link that will take you to a fraudulent form or website where your personal information will be captured, and malware will sometimes simultaneously be installed on your device.
In recent years, scammers have been sending unsolicited text messages to individuals, saying they qualify for a tax refund or other tax benefit. The text messages look legitimate, and people often click on the links because they’re excited about their refund. This is unfortunate because there’s no refund and they’re instead providing criminals with their personal information while exposing their devices to malware. Students, faculty, and staff at educational institutions nationwide with .edu email addresses were recently targeted with this fake tax refund scam.
In addition to enticing recipients with the promise of a tax refund, some false texts might refer to “COVID relief” or “stimulus payments.”
Keep in mind that the IRS will not text, email, or call you first. Their first contact with you will be a letter in the mail.
So how can you protect yourself from IRS imposters?
Never provide money or information to anyone who calls, texts, emails, or direct messages you on social media. Don’t provide your social security number or even a portion of it. Don’t give credit or debit card information over the phone and keep your banking information safe by not providing it.
If you’re on the phone with someone claiming to be an IRS agent, ask for their name, badge number, and a number you can call them back at. Then call the Treasury Inspector General for Tax Administration at 800-366-4484. Provide them with the details you gathered about the caller and see if the call was legitimate. If yes, call them back. If no, you can report the call online to the TIGTA.
Never call back a phone number left by a robocaller, even if it appears legitimate on caller ID. Remember that fraudsters can trick caller ID to make their call appear to be from the IRS. Consider installing a call-blocking app on your smartphone or signing up for a call-blocking service from your service provider.
If you receive a suspicious email or text, never reply to it and never click on any link or open any attachment. Forward unsolicited emails claiming to be from the IRS to phishing@irs.gov. If you received an unsolicited text, take a screenshot of it and attach it in an email to phishing@irs.gov. Remember to delete the original email or text from your device.
If you clicked on a link in a text or email and think you might have exposed your personal information or device to scammers, you can file a report with the FTC here and they’ll customize a recovery plan for you.
If you fall victim to an IRS imposter and suffer financial losses or theft of your identity, report it to the FTC at 877-FTC-HELP (877-382-4357). Or report it online here.
You should also consider creating an identity protection PIN. This is a six-digit PIN provided to you by the IRS that will prevent others from filing a tax return using your social security number or individual taxpayer identification number. You can obtain an identity protection PIN here.
If you receive a suspicious letter in the mail, you can verify that it’s from the IRS by entering the number of the letter, form, or notice at this IRS search page. If the search returns a result, compare the result to the document you received to make sure they match. If no results are returned, let the IRS know at 800-829-1040.
Beware that IRS imposters are part of a sophisticated and well-funded criminal ring. They might know all or part of your social security number, for example. Never confirm your social security number on the phone. If a caller knows part of your social security number, file a fraud alert or freeze your credit. To do so, contact the three credit reporting bureaus Experian, Equifax, and TransUnion.
You can also set up a My Social Security Account and check it regularly for unusual activity.
If you think you owe back taxes, consider getting ahead of the problem by reaching out to the IRS. You can call the agency at 800-829-1040 or visit the IRS website. Conversely, if you think you’re due a tax refund, you can check the status of your refund at the Where’s My Refund Page.
Finally, and importantly, talk about the incident with family and friends so others can provide support to you and be made aware of the types of scams that can occur. They’ll thank you for the knowledge, and so will we!
A closing thought
If people are aware of IRS imposter scams, they’re 80% less likely to engage in them, according to AARP. If people do engage, they’re 40% less likely to fall victim if they know about a scam in advance.
Knowledge is power. That’s why we’re helping spread the word about IRS imposter scams. We hope you’ll do the same!