OK so the filing deadline has passed, and you have resolved this year’s deadline. Merrily going on in life that your taxes are being paid until next filing time, has been a safe place most Americans have had the luxury of living comfortably with. Cybercriminals lurk as a year-round phenomenon, but they know after filing would be a logical time to hear from the Taxing authorities to “verify” your taxpayer information as historically they would reach out by mail to claim some issue that results in additional tax liability. We are all off thinking of the next event of summer fun in our lives, so the tendency is to just click it fast and resolve this immediately. We can’t offer you better advice than to slow down whenever you hear from the Tax authorities! You see, as professionals, we find more and more that emails and calls seeking Tax payments or information tend to be thefts and not the “Taxing Authorities” they may tend to portray.

A tax return contains virtually all the information an identity thief would need, so it’s no wonder that it’s a common target. The most common scam involves trying to get taxpayers to “verify” sensitive information from their tax return – like their Social Security number or bank account information.

The other most common tax scam is that you owe additional tax and that must be paid right away. While it might cost more if you wait (due to additional interest charges), not paying the fraudster saves each dollar the less sophisticated taxpayer might get scammed for. Examples are the scammer may claim that there was a miscalculation on the return, or then there are these old back taxes that are owed for whatever reason. Again, if they haven’t been paid for this long what’s a couple weeks more? True Taxing Authorities will always allow for some time to evaluate. Here is the kicker: pay the Taxing Authorities with a method of payment, other than the usual check, such as sending the funds on a prepaid debit card. Duh, never ever pay your taxes with this method.

As mentioned, there is no reason to detail the many current successful Tax scams as there are many variations of each individual scam. We want you to know what to look for, so that you can avoid most of them simply by saying no and evaluating if the original concern has ANY merit.

So direct from the IRS are five WARNING SIGNS of tax scams that all American taxpayers should know. All types of scams would be too much to layout for you, so the IRS is focusing on the most prevalent. Further, these criminals continue to be creative and unfortunately, the IRS needs to understand what’s going on out there before they can adapt to this constantly evolving environment.

The IRS will NEVER, EVER:

  1. Call you to demand that you pay any tax debt immediately or with a specific payment method. The IRS initiates contact with taxpayers by mailing a bill first, and you’ll always have time to review and contest any legitimate IRS tax bill. Furthermore, the only place legitimate tax payments are made is to the U.S. Treasury.
  2. Threaten to have you arrested for nonpayment. No, the IRS doesn’t call the police over a simple outstanding tax bill!
  3. Ask for payment without giving you the opportunity to question how much you owe. This is one of the basic provisions of the taxpayer’s “bill of rights” issued by the IRS. You also have the right to appeal the commencing of such option stops the money collection process, period.
  4. Ask you for credit card or debit card numbers over the phone. The IRS does accept credit and debit cards, but through payment processors listed on irs.gov.
  5. Use email, texts, or social media to discuss your tax issues. The IRS generally communicates with taxpayers by mail. It won’t just send you an email with a tax bill, nor will a legitimate IRS agent reach out to you via Facebook or Twitter.

These are at the heart of many common scams that the IRS is seeing over and over again. If the individual or organization you’re dealing with does any of ONE these things, you are to feel CERTAIN that an attempt to scam you is occurring.

Once you believe that you’ve been targeted by scammers, its important to use the internet to protect yourself and others. You can report scam emails at phishing@irs.gov, and you can report any scam (phone, email, or otherwise) to the Treasury Inspector General for Tax Administration as well as the Federal Trade Commission.

Fortunately, much of tax scams are 100% avoidable if you know what to look for. Obviously, if you see any signs of a scam, you should hang up the phone or ignore the email or text you received. Don’t give out any personal information. There are limited places that your social security or bank account number needs to be disclosed. We start by saying we do not supply that and many times legitimate organizations accept that or find a more comfortable method for you to share it.

If you think the call or email might be legitimate, make some notes for yourself and then call the IRS directly or log into irs.gov to view your actual tax information. This way, you’ll be certain that you’re dealing with the correct authorities. This is not a place where you want to be any less than 100% sure who you are dealing with.

Do you need professional help with your nonprofit? Czarnowski & Beer is currently offering a complimentary, no-obligation evaluation of your nonprofit organization. Visit our nonprofit offer page or contact us at info@czarbeer.com or call (212) 397-2970 and we will be happy to help you and answer your questions.