Dealing with the IRS can be scary. Forget to mail in your tax return? You can bet they’ll be notifying you. They’ll even go so far as to garnish your wages and your bank account – every last penny in your bank account.
But what about if you get a call from the IRS? What do you do? How do you tell the difference between a legitimate request for information and an IRS scam call? Here’s what you need to know about the IRS, and how to avoid becoming a victim of financial crime.
IRS Scam Calls
Your phone rings. You pick up, and hear a voice on the other end. The caller is usually in a noisy environment; you can hear his coworkers talking around him.
“Yes, is this Sarah Smith? S-m-i-t-h.” The caller may have an accent, making him difficult to understand.
“Yes,” you answer.
“This is Daniel Barker. I’m calling from the Internal Revenue Service. There has been a problem with your tax return.”
You panic. You did everything right, right? These calls are nothing new. Scammers have been preying on taxpayers for years. Knowing that the average US citizen fears nothing more than trouble with the IRS, these scammers call at all times of the year. They’ll demand your social security number, your home address, and threatened to have you arrested if you don’t provide this information.
Relax, citizens of the United States. The IRS is scary, but Uncle Sam will never do that to you. If you receive a call like this, it’s one of the thousands of IRS scam calls placed each year, and you’ve got nothing to worry about.
It’s important that you know a bit about how the IRS operates, and know the signs of these scam calls.
Trouble with Your Return?
If you legitimately have trouble with your return, the IRS can be nasty to deal with. But they’re not going to call you, nor will they email you. Instead, they’ll send you a letter in the mail, sometimes certified, outlining the problem with your return. Trust us when we say that you’ll know if you have a problem.
Let’s say that you forgot to mail in your 2011 Federal Return. It’s now 2017, and the IRS has discovered this oversight. The first thing that will happen is you’ll get a letter in the mail. You’ll be presented with the balance that the IRS has calculated that you owe – or in some cases the amount to be refunded to you.
This amount is based solely on income reported to the IRS. There are no deductions or other adjustments used to make the calculation. There will be, however, a very hefty interest penalty included.
Once you receive that letter, you’ll call the IRS. Your letter will include an identification number which is different from your social security number. It’s that number which you will provide to the person on the other end of the line.
If you fail to call them, they still won’t call you. Instead, they’ll send a wage garnishment letter to your employer. They’ll also deduct every single penny from your bank account, up to the amount you supposedly owe. At this point you have three options. First, you could consider your debt paid. You won’t hear from them again. Second, you could call to set up a payment arrangement for the full balance. Third, you can mail in that return that you failed to produce back in 2011.
The IRS won’t call you. That’s the most important thing to know about IRS scam calls. They’re all scams.
Signs of IRS Scam Calls
You already know that if someone calls you claiming to be from the Internal Revenue Service, it’s likely a scam. But it can still be scary. Sometimes these callers will even manipulate caller ID to reflect a call from the IRS.
These callers already know a lot about you. Maybe your kid plugged your name into a website, or maybe someone sold your information after you made a purchase. Regardless, they know enough about you to get you riled up.
Your name, the last four of your social (sometimes even your whole social), your address, your place of employment and names of family members are very easy to come by, and the scammers will have that information. When they call, they’ll use this information to scare you into sending them an immediate payment.
Payment forms that these callers demand vary, and can be a bit bizarre. They’ll usually ask for your bank account or credit card information. But recently, victims in Wyoming were asked for payment in the form of iTunes gift cards. Surely the IRS has no need for those, right?
More often than not, the IRS scam calls will include a threat of immediate arrest. Again, not the IRS. The IRS just wants its money – they’ll get their money before they see you thrown in a cell.
In rare cases, these callers will inform you that you’re due a refund. They’ll require your bank account information and your social security number. Don’t give them this information. The IRS will do nothing more than mail you a check if you’re due any money.
In short, if you receive a call from the IRS demanding any information, hang up. If you feel that you owe money, call the IRS to sort the issue.
What to Do If You Receive IRS Scam Calls
If you do receive one of these calls, the best thing to do is to hang up immediately. Take note of the phone number, and report it to the Federal Trade Commission and the IRS Impersonation Scam Reporting hotline.
Do not give personal information about yourself. The IRS knows how to find you, and it knows how to get money from you. Most importantly, do not give these callers money in any form.
The best way to avoid IRS scam calls is to refrain from giving out personal information online, on survey sites and others. But it can happen to anyone. If you receive one of these calls, you’ve got nothing to worry about. Hang up the phone and call 1-800-829-1040 to determine if the IRS is truly looking for you.