You hear the ads all the time: “the IRS will hunt you down!” But will they? The chance your tax return is audited by the IRS certainly exists, but it’s very slim. However, this has not stopped scammers from trying to trick you while pretending to be the IRS. Criminals can impersonate an IRS agent and send fake emails or even leave you fraudulent voicemails demanding immediate payment, or else! So how can you know when the IRS is legitimately trying to contact you? When is it real and when is it a scam? The IRS recently issued a reminder to taxpayers detailing ways they will and will not contact taxpayers:
Here are some of the ways the IRS may contact you:
1. By mail: This is far and away the most common method of communication the IRS will use with you. Most times, they will reach out to you more than once via mail before reaching out by phone. The letters sent out to taxpayers are referred to as “notices.”
2. By phone: This is rare, but it can happen. If contacting you by phone, the IRS may even send you a notice in the mail before-hand. A phone call is generally used to collect past-due tax, a delinquent tax return, or set up an appointment to tour your office or factory as part of a criminal investigation.
So, if you have filed an honest, timely return and paid all taxes due, it is unlikely you’ll receive a phone call from the IRS. If you are unsure about a phone call you’ve received, you can hang up and call the IRS back at 1-800-829-1040 to confirm if it is legitimate.
3. In Person: This is very, very rare, but the IRS has the right to stop by your place of business for an inspection. This is generally only done in extreme cases when the IRS is conducting an investigation and you will likely receive many communications leading up to this point. IRS representatives will always provide their official credentials, called a pocket commission and a HSPD-12 card. The HSPD-12 card is a government-wide standard form of reliable identification for federal employees and contractors. Taxpayers have the right to see these credentials – when in doubt during an in-person IRS visit, ask for them. IRS employees can provide an additional method to verify their identification. Upon request, they’re able to provide a toll-free employee verification telephone number.
Here are some of the things the IRS WILL NOT do when contacting you:
1. Contact you via email, text, or social media: The IRS does not discuss a tax liability, refund or tax return status using any of these methods. If you receive an email, text or communication via social media claiming to be from the IRS, it is likely fraudulent and can be deleted. Do not click on any links or interact with the communication in any way – just delete it.
2. Demand payment: The IRS will not contact you and “demand” payment of a past-due balance. All discussions with the IRS should start with a letter in the mail detailing what the IRS believes the taxpayer owes, and the taxpayer can appeal this amount. If you receive a communication from the IRS “demanding” that you make payment, you can probably ignore it. Confirm with your advisor or CPA if you are unsure of any request for payment you have received.
3. Demand a certain payment method is used: The IRS will never demand a certain payment method like a wire transfer, pre-paid debit card, credit card, or direct withdrawal from a checking account be used to satisfy a liability. Also, no IRS agent should be asking for any account numbers or personal information – if this happens, it is likely fraudulent, and you should not provide any information. People who owe taxes should make payments to the U.S. Treasury or review IRS.gov/payments for IRS online options.
4. Threaten to involve local authorities: Some scammers will tell you if payment is not received, they will contact local authorities or other government agencies to have you arrested. Again, should you receive a communication threatening something like this, you can ignore it.
Hopefully the above arms you with good information to be able to sort through most items you could potentially receive from the IRS or scammers pretending to be them. If you receive a communication from the IRS and are unsure of its legitimacy, err on the side of caution and get your advisors involved immediately.
Matt Foltz, CPA is an Advisor at BDF. He earned his Bachelor of Science in Accountancy from Saint Joseph’s College and his Masters of Science in Accountancy from the University of Notre Dame. Matt is a Certified Public Accountant and a CERTIFIED FINANCIAL PLANNER™ professional.