2016 YEAR-END
TAX GUIDE
Tax Scams: Warning to All Taxpayers!

Tax scams continue to be on the rise. It is important to use caution when viewing emails and receiving telephone calls supposedly from the Internal Revenue Service (IRS). Falling victim to one of these scams can not only be costly, but also aggravating in the time it can take to straighten out the resulting mess.

There are a multitude of tactics that these devious criminals employ to ensnare their prey. Here are some examples of possible scams you may encounter. Let them all be a warning to everyone to be careful:

Phone Scams
In a typical phone scam situation, potential victims are threatened with deportation, arrest, shutting off utilities, or revocation of drivers' licenses by a scam caller. Callers are frequently insulting or hostile in an effort to scare potential victims into action. Potential victims may be told they are entitled to big refunds or, conversely, that they owe money that must be paid immediately to the IRS. If unsuccessful the first time, phone scammers may call back and try a new strategy.

The crooks are very resourceful so if your house has an IRS lien, remember that that information is public and is often times used against a victim.

If you get a phone call from someone indicating they are from the IRS, note the following:

The IRS Will Never:

Call to demand immediate payment over the phone, nor will the agency call about taxes owed without first having mailed you a bill. All correspondence from the IRS comes in the mail.
  • Threaten to immediately bring in local police or other law-enforcement groups to have you arrested for not paying an IRS tax bill.
  • Demand that you pay taxes without giving you the opportunity to question or appeal the amount owed.
  • Require you to use a specific payment method for your taxes, such as a prepaid debit card, gift card or wire transfer.
  • Ask for credit or debit card numbers over the phone.

If you get a phone call from someone claiming to be from the IRS and asking for money and you don't think you owe taxes, here's what you should do:

  • Do not give out any information. Hang up immediately.
  • Contact the Treasury Inspector General for Tax Administration ("TIGTA") to report the call. Use their "IRS Impersonation Scam Reporting" web page or call 800-366-4484.
  • Report it to the Federal Trade Commission. Use the "FTC Complaint Assistant" on FTC.gov. Please add "IRS Telephone Scam" in the notes.
  • If you think you might owe taxes, call the IRS directly at 800-829-1040.

If you get a call and are surprised that the caller knows so much about you, remember that it is easy to buy a social security number and much other information, such as address, age and children's names are easily available on the internet or social media. These guys and gals will do their homework before calling you!

Email Scams
It is also important to be on the lookout for possible email scams that use the IRS logo as a lure. The IRS does not initiate contact with taxpayers by email to request personal or financial information. In fact, in most situations, the IRS does NOT use email at all. 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 emails or any other means. If you receive a suspicious email, do not open any attachments or click on any links contained in the message.

Here is a quick summary of some recent scam situations:

  • Automated Phone Scam Calls – Automated calls where scammers leave urgent callback requests through the phone telling taxpayers to call back to settle their "tax bill." These fake calls generally claim to be the last warnings before legal action is taken.
  • Requests for Fake Tax Payments Using Gift Cards – IRS impersonators are demanding payments on iTunes and other gift cards. The IRS reminds taxpayers that any request to settle a bill by putting money on any form of gift card is a clear indication of a scam.
  • Bogus "Federal Student Tax" – Scammers try to convince students to wire money immediately to the scammer. If the victim does not fall quickly enough for this fake "federal student tax", the scammer threatens to report the student to the police.
  • Soliciting W-2 Information – Scammers, posing as company executives, email payroll or human resources professionals asking for employee personal data or Form W-2 that contain Social Security numbers and other personally identifiable information.
  • "Verifying" Tax Return Information over the Phone – Scammers call indicating that they need to verify a few details to process your tax return. The scam tries to get you to give up personal information such as a Social Security number or personal financial information, such as bank numbers or credit cards.
  • Phishing and Malware – Fake e-mails are being sent to trick taxpayers into thinking the emails are official communications from the IRS or others in the tax industry, including tax software companies. The phishing schemes can ask taxpayers about a wide range of topics or contain fake email links. The fake email links can take you to sites designed to imitate an official-looking website, such as IRS.gov. The sites ask for Social Security numbers and other personal information. The sites also may carry malware, which can infect computers and allow criminal access.
  • State Registration – Since state entity registration is public data, the scam involves sending a bill for registration to new businesses for small amounts. For example, several of our clients received a bill from a "fake" NYS government entity requiring a $125 annual fee for creating a new entity. Most people will pay the small fee and assume it relates to the creation of the new entity. Be careful and check the logos.

As we approach the New Year, we at Marcum would like to ensure all of our clients, friends and readers are safe and are aware of these tactics. Be careful, remain skeptical and if you have any questions related to a funny looking email, letter or a call, please contact your Marcum Tax Professional.