How to Tell if YOur IRS Letter is rEal - Is it Real or is it a Scam?

What are the latest scams floating out there? How do you know if the notices that you've been receiving from the IRS are real? What should you do if they are real?

 
The Internal Revenue Service has issued a warning that tax-related scams continue across the nation even though the tax filing season has ended for most taxpayers. People should remain on alert to new and emerging schemes involving the tax system that continue to claim victims.“We continue to urge people to watch out for new and evolving schemes this summer,” said IRS Commissioner John Koskinen. “Many of these are variations of a theme, involving fictitious tax bills and demands to pay by purchasing and transferring information involving a gift card or iTunes card. Taxpayers can avoid these and other tricky financial scams by taking a few minutes to review the tell-tale signs of these schemes.”

EFTPS Scam
A new scam which is linked to the Electronic Federal Tax Payment System (EFTPS) has been reported nationwide. In this ruse, con artists call to demand immediate tax payment. The caller claims to be from the IRS and says that two certified letters mailed to the taxpayer were returned as undeliverable. The scammer then threatens arrest if a payment is not made immediately by a specific prepaid debit card. Victims are told that the debit card is linked to the EFTPS when, in reality, it is controlled entirely by the scammer. Victims are warned not to talk to their tax preparer, attorney or the local IRS office until after the payment is made.

 “Robo-call” Messages
The IRS does not call and leave prerecorded, urgent messages asking for a call back. In this tactic, scammers tell victims that if they do not call back, a warrant will be issued for their arrest. Those who do respond are told they must make immediate payment either by a specific prepaid debit card or by wire transfer.
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Private Debt Collection Scams
The IRS recently began sending letters to a relatively small group of taxpayers whose overdue federal tax accounts are being assigned to one of four private collection agencies. Taxpayers should be on the lookout for scammers posing as private collection firms. The IRS-authorized firms will only be calling about a tax debt the person has had – and has been aware of – for years. The IRS would have previously contacted taxpayers about their tax debt.

Scams are targeting people with limited English proficiency

Tell Tale Signs of a Scam:
The IRS (and its authorized private collection agencies) will never:

• Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. The IRS does not use these methods for tax payments. The IRS will usually first mail a bill to any taxpayer who owes taxes. All tax payments should only be made payable to the U.S. Treasury and checks should never be made payable to third parties.
• Threaten to immediately bring in local police or other law-enforcement groups to have the taxpayer arrested for not paying.
• Demand that taxes be paid without giving the taxpayer the opportunity to question or appeal the amount owed.
• Ask for credit or debit card numbers over the phone.

For anyone who owes taxes or thinks they do:

• Call the number on the billing notice, or
• Call the IRS at 800-829-1040. IRS workers can help

​For anyone who doesn’t owe taxes and has no reason to think they do, do not give out any information. Hang up immediately.

How to Know It’s Really the IRS Calling or Knocking
The IRS initiates most contacts through regular mail delivered by the United States Postal Service. However, there are special circumstances in which the IRS will call or come to a home or business, such as:

• when a taxpayer has an overdue tax bill,
• to secure a delinquent tax return or a delinquent employment tax payment, or,
• to tour a business as part of an audit or during criminal investigations.

Even then, taxpayers will generally first receive several letters

What Happens if You Do Receive a Letter From the IRS?
The IRS mails millions of letters every year to taxpayers for a variety of reasons.  Keep the following suggestions in mind on how to best handle a letter or notice from IRS:

• Do not panic.  Simply responding will take care of most IRS letters and notices.
• Do not ignore the letter.  Most IRS notices are about federal tax returns or tax accounts.  Each notice deals with a specific issue and includes specific instructions on what to do.  Read the letter carefully; some notices or letters require a response by a specific date.
• Respond timely.  A notice may likely be about changes to a taxpayer’s account, taxes owed or a payment request.  Sometimes a notice may ask for more information about a specific issue or item on a tax return.  A timely response could minimize additional interest and penalty charges.
• If a notice indicates a changed or corrected tax return, review the information and compare it with your original return.  If the taxpayer agrees, they should note the corrections on their copy of the tax return for their records.  There is usually no need to reply to a notice unless specifically instructed to do so, or to make a payment.
• Taxpayers must respond to a notice they do not agree with.  They should mail a letter explaining why they disagree to the address on the contact stub at the bottom of the notice.  Include information and documents for the IRS to consider and allow at least 30 days for a response.
• There is no need to call the IRS or make an appointment at a taxpayer assistance center for most notices.  If a call seems necessary, use the phone number in the upper right-hand corner of the notice.  Be sure to have a copy of the related tax return and notice when calling.
• Always keep copies of any notices received with tax returns.
• The IRS and its authorized private collection agency will send letters and notices by mail.  The IRS will not demand payment a certain way, such as prepaid debit or credit card. Taxpayers have several payment options for taxes owed.  IRS.gov has more information on payment methods.
• If you feel that you need assistance with interpretation of your notice or letter or help with your response, you should contact a competent tax professional.

Information provided by Elite Tax & Accounting
David J White CPA
Scott Itri EA

You may contact us at (801) 571-4011 or csr@elitetaxpros.com
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