By Catherine Blinder
April 15. The final date for filing taxes is quickly approaching, and many people have already filed their annual tax return (especially those who are expecting a refund!). But some people, for many reasons, are not current in their filings.
There are two common scams to look out for, particularly around this time of year. First, whether you are current on your tax filings or not, someone pretending to be from the IRS may call you to steal your identity or money. Second, someone may offer you tax support or advice services with promises of significant savings.
Every year we see more scams involving phony IRS calls and emails. This year is no exception. If you respond to these scam calls with the information they are requesting – often very personal information such as your social security number, bank account numbers and birth dates – you put yourself at risk of having your identity stolen and your bank accounts hacked. If you make the payment they request, you will not see that money again, particularly if you use a prepaid card.
Recently, an aggressive phone scam targeting refugees and immigrants has been reported in every single state in the country, but especially those where there are heavy concentrations of immigrants.
These scammers are skilled at tricking people. The caller ID often shows IRS, they sound convincing because they use language that sounds like official government language, they use fake names and identification numbers and they often know a lot about the person they are calling. But much of that information is easily available to them online.
Victims are often told they owe money to the IRS and it must be paid immediately using a pre-loaded debit card or wire transfer. If the victim hesitates, or asks questions, they are often threatened with arrest, deportation or suspension of driver’s license, and many times the caller becomes hostile and insulting.
DO NOT BE FOOLED! The IRS will never:
- Call to demand immediate payment or threaten you personally.
- Call about taxes owed without first having mailed you a bill.
- Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
- Require you to use a specific payment method for your taxes, such as a prepaid debit card.
- Ask for credit or debit card numbers over the phone.
- Threaten to bring in local police or other law-enforcement groups to have you arrested for not paying.
If the phone is unanswered and they leave a message, it is often with an “urgent” callback request, and more threats. Please don’t return the call.
The other thing the scammers will do is call people and tell them that they have a refund due and try to trick them into sharing private information in that way. Again, these scammers can sound convincing when they call. They may seem to know a lot about you, and those using this scam will be less threatening, since they appear to be offering you something, but again, do not trust anyone who calls with an offer that sounds too good to be true. You put yourself in danger of identity theft.
If you get a phone call from someone claiming to be from the IRS, here’s what you should do:
- If you think you owe taxes, call the IRS at 1.800.829.1040. The IRS workers can help you with a payment issue.
- If you know you don’t owe taxes or have no reason to believe that you do, report the incident to the Treasury Inspector General for Tax Administration (TIGTA) at 1.800.366.4484 or at www.tigta.gov.
- You can file a complaint using the FTC Complaint Assistant; choose “Other” and then “Imposter Scams.” If the complaint involves someone impersonating the IRS, include the words “IRS Telephone Scam” in the notes.
Remember, too, the IRS does not use unsolicited email, text messages or any social media to discuss your personal tax issue.
Tax Support and Advice Service Red Flags
The other scam that occurs this time of year is with companies who provide “tax negotiation support and advice.”
If you have debt with the IRS, and are looking for tax negotiation support, watch out for some of these advertising red flags before you commit to a service:
- “Money-Back Guarantee” – Some debt negotiators offer 30- or 60-day money back guarantees. Proceedings with the IRS take months, sometimes years. If you aren’t happy with the service provided by your negotiator, you may not know until after your guarantee expires.
- Reviews – Not all reviews are created equal. Sometimes customers receive extra discounts or incentives to provide good reviews. A person who gave the negotiator a glowing review may have a completely different tax situation than you do.
- “Licensed in all 50 states” – This can be a trick because not all states require negotiators to be licensed. “Debt negotiating” and “debt adjusting” can mean different things in other states. The IRS requires anyone representing a taxpayer to be an “enrolled agent,” a lawyer or a CPA. Make sure any negotiator you hire to help you with the IRS has one of those three titles.
- Settlement Promises – A company may promise to help “settle your tax debt,” or to “avoid liens, levies and wage garnishments.” Every tax case is different, and no one can promise any result when working with the IRS.
- Legal Protection – Debt negotiators may promise “legal protection,” but the only way to have true legal protection is to hire a lawyer. Many negotiators are not lawyers, and they are not providing you legal advice.
- “Full Service” – Does the negotiator claim to be “full service?” The IRS has several kinds of proceedings. Some negotiators will only help with one kind of proceeding, leaving you on your own for other proceedings. Double check what the negotiator will and won’t do for you before paying them money.
- Personal Information – In order to negotiate with the IRS, any legitimate negotiator will require a lot of your highly personal information, and you should only turn it over to a person or company that you trust.
- Sign up now! – Respectable negotiators will give you the opportunity to think about signing up for their services. If you feel pressure to join or keep getting harassing phone calls, think twice before giving the negotiator your money.
In February, the Department of Consumer Protection settled with 911 Tax Relief, LLC regarding deceptive advertising. DCP is pleased to announce that 911 Tax has agreed to not advertise in Connecticut, not take any more Connecticut customers and pay restitution to customers. Other companies, however, are sure to try to take their place.
Remember, an informed consumer is a smart consumer, and asking questions, taking your time and checking with family and friends is always a smart thing to do.
This article was written by Catherine Blinder, chief education and outreach officer of the Department of Consumer Protection of the State of Connecticut. To learn more about how the Department of Consumer Protection can help, visit us online at www.ct.gov/dcp.