“Crime doesn’t pay.” But that doesn’t stop criminals from trying. In recent years there has been an uptick in tax related fraudulent activity. The crooks are adapting some of their most successful scams and applying the concepts to leverage off the US tax system. Therefore, it’s important to use caution when reviewing IRS notices,viewing emails and receiving telephone calls purportedly from the IRS.

Moneta Group’s Tax Strategies team offers the following advice:

Tax Return Identity Theft

Tax return identity theft occurs when criminals are able to obtain enough of your personal information (full name, birth date, social security number and address) to file a fake tax return. Everything else on the tax return may be bogus but with a valid social security number and name match, a false return can be filed requesting a refund be direct deposited to a bank account that the scammer can access. After the refund is received the account is closed and the scammer quietly slips away.

The first indication that you have become a victim of this scheme may be when the IRS rejects your attempt to e-file because the IRS has previously accepted a return with your social security number. Or it may be a letter from IRS questioning your refund – when you haven’t filed yet.

In either case, you need to notify the IRS anytime you maybe a victim of identity theft. Form14039, Identity Theft Affidavit, needs to be filed with the IRS as soon as possible. Resolution can take six months to a year or more. Other actions that should be taken can be found on the IRS web site at www.irs.gov. Your Moneta Group and Tax Strategies advisors can also assist you.

Phone Scams

In April, the IRS issued a warning about phone scams but the publicity hasn’t slowed down the scammers. In recent months a few of our clients have been contacted by persons presenting themselves as IRS “officers” and demanding immediate payment of back taxes. Although tactics vary, our clients were threatened with arrest by local police if payment was not made immediately.

Scammers may:

  • Use fake names and IRS badge numbers.
  • May know the last four digits of the victim’s Social Security Number.
  • Spoof caller ID to appear as if the IRS is calling.
  • Send bogus IRS emails to support the bogus calls.
  • Call a second time claiming to be the police or department of motor vehicles. The caller ID again appears to support their claim.

The IRS always sends taxpayers a written notification of any tax due via the U.S. mail. Also, the IRS will never ask for credit card, debit card, or prepaid card information over the telephone.

If you get a phone call from someone claiming to be from the IRS and you think you might owe taxes, call the IRS at (800) 829-1040. If you don’t owe taxes or have no reason to think you owe any taxes, report the incident to the Treasury Inspector General for Tax Administration at (800) 366-4484.

If you are targeted by this scam, you should also file a complaint with the Federal Trade Commission using the “FTC Complaint Assistant” at www.FTC.gov and adding “IRS Telephone Scam” to the comments portion of the complaint.

Email Scams

Our natural anxiety over paying taxes and dealing with the IRS makes us perfect targets for email scams that use the IRS as a lure. You should know that the IRS does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels. The IRS also does not ask for PINs; passwords; or similar confidential access information for credit card, bank, or other financial accounts via email or any other means.

If you receive a suspicious email, do not open any attachments or click on any links contained in the message. Instead, forward the email to phishing@irs.gov.

We hope this information will help keep you safe from potential IRS tax scams. If you have any questions or need additional information or any other assistance, please give us a call.