IRS Tax FraudThis year the thieves are more aggressive than ever.

The April 15 tax deadline is still a few months away, but our clients have already started reporting the receipt of fake phone calls from threatening IRS agents. This familiar scam is back, but the volume and sophistication of these calls, along with other IRS tax scams, is on the rise. The IRS reports that there have been more than 600,000 complaints over the last couple of years, costing victims over $20 million as a result of these tax scams. The Better Business Bureau reported tax scams as #1 on its list of top 2015 scams.

IRS phone scam alert

The most commonly reported scam this year is an attempt to steal personal information over the phone – also known as phishing – through threats of an IRS lawsuit or arrest. Someone calls and claims to be an IRS representative. The caller tells the victim (or leaves a message) that he or she has a delinquent tax bill, and could face a lawsuit or imprisonment if the bill isn’t paid. The caller then tries to get the victim to pay immediately, or at least provide personal information to “verify” the account.

Although the calls often originate from overseas, the thieves know how to manipulate caller ID so they appear to be from the US, and even from the IRS. While some scammers sound unprofessional, others are pretty convincing actors pretending to be IRS agents.

The IRS has released a list of things that it does not do or say, including:

  • Call without first communicating first by regular mail.
  • Demand immediate payment without allowing you to ask questions or appeal.
  • Ask for credit card or other personal information over the phone.
  • Force you to pay a certain way, like by debit card or wire transfer.
  • Threaten your arrest.

IRS tax scams are getting more sophisticated

While fraudulent phone call volume seems to be increasing the fastest, there are also more reports of email scams. These emails often use IRS letterhead in an attempt to get the recipient to click or call. There’s even a phishing scam geared toward CPAs. We receive a fake email asking us to update our information in the IRS portal. If we attempt to log in, the thieves steal our username and password.

How to avoid being scammed

I know that you’ve probably heard most of these tips before, but thousands of Americans fall for these scams every year. Be vigilant!

  • Use voicemail to screen your calls. If you don’t recognize a number, let it ring to voicemail. You can always call back. If it’s a scam, block the phone number.
  • Google the originating phone number. Although these thieves can fool (spoof) caller ID, look for online reports of scams on that number.
  • Don’t open or respond to email messages. Even if the email looks official, it isn’t from the IRS. Just downloading the images can cause virus or malware issues, let alone clicking on a link.
  • When in doubt, contact your CPA. We can quickly confirm whether there’s a real issue.

To learn more about tax scams, visit the Tax Scams/Consumer Alerts section of the website. The IRS has even released a YouTube video and podcast to help you identify scams.

Neal Bach, CPA