Every day as we read the news it seems that another scam has come about which threatens to damage your finances or steal your identity. Earlier this week, for that very reason, we wrote a post about knowing your rights. And now today we look at the news and find evidence of yet another new scam – this one meant to fool you into thinking you owe the IRS.
As scams gain prevalence in our society, consumers are getting better and better at spotting them. The downfall? Scammers are becoming that much more resourceful in turn. This latest scam can fool even the savviest consumer. Read on to find out how it works and how you can protect yourself from other tax-related scams.
The Latest Phone Scam – Going After Taxpayers
Let’s say you’re going about your day and you unexpectedly receive a call from the IRS. You know that it’s the IRS calling because (A) that’s the name and number that shows up on your caller ID and (B) the person calling claims to be from the IRS and even proves it by giving you a badge number or telling you the last four digits of your social security number. Then they tell you that you owe money on your taxes.
It must be true, right?
Well, not necessarily. These are actually signs of the latest phone scam that’s running rampant and costing taxpayers money they don’t owe. If you’re on the receiving end, you would have no reason to believe that the call isn’t legitimate.
So how can you tell it’s a scam?
For one thing, an IRS tax agent is not allowed to use threatening language – so if you’re experiencing harassment or threats, then that could be your first sign. If the caller tells you to pay the money you owe via prepaid card or wire transfer, then you can tell for sure that it’s a scam. The IRS will never ask you for payments this way over the phone (although payments can be applied via card or wire transfer on their website).
In the heat of the moment, it’s easy to know these signs but still experience very real fear. Scammers heighten this fear by using fear tactics, targeting immigrants and threatening to have them deported, and even calling back “from” a DMV or police phone number to further the threats. As scary as that sounds, it’s just even more proof that you’re being scammed. If this happens to you, call the Treasury Inspector General for Tax Administration and report the incident immediately: 800-366-4484.
How You Can Find Out if You Actually Owe Money
If you do in fact owe money to the IRS, receiving a phone call is not likely how you’d find out. If you file your taxes with the help of a tax professional, they will let you know if you owe or if you’re getting a return. If you file on your own, you would receive this same information. And if you’ve owed for some time, haven’t paid in full after your return, or haven’t filed a return, you will receive a letter from the IRS.
Are you still not sure you owe? Or fear you may have missed a letter in the mail? Then call your local IRS or their general telephone support line to find out for sure. That is the only way you can be certain that you owe money and then you can learn how to pay in a way that is safe.
Paying Back Tax Debt
Finally, if you do find out that you owe, realize that you don’t have to pay the full amount all at once if you’re unable to do so. The IRS understands economic hardship and has plans in place to help. You could set up an installment plan or apply for an Offer in Compromise.
The IRS offers these, and even more options for those who want to pay their taxes back but are unable to do so right away.
Scams are scary and new ones seem to pop up all the time. However, you may not have the time you need to stay up to date on the latest scams each and every day. So if you experience this, or any other potential scam, then follow these general rules of thumb to protect yourself: (1) Understand that anyone using threatening or harassing language is unlikely to be the professional they say they are; (2) If something sounds fishy, it probably is; (3) If you receive correspondence over phone, email, or even postal mail that claims you owe something, always double check by calling the institution directly to confirm. A few minutes on the phone can save your money and your identity.
Image Credit: Leo Reynolds