Benjamin Franklin notably said that only death and taxes were inevitable. This adage still holds true today. If you live, work or invest in the U.S., you will likely have a tax debt in some way, shape or form. Today's tax landscape is much, much more complicated than that experienced by our founding fathers, though. Not only do people nowadays have to deal with a tax code that is literally tens of thousands of pages long and an IRS procedural manual that's approximately the same size, they also have to deal with ever-evolving methods used by scammers and criminals trying to separate them from their hard-earned money.
This year's most popular scam - widespread enough to warrant an official notice from the IRS itself issued on September 23 - involves savvy tax scammers taking advantage of myths and misconceptions swirling about compliance with the mandatory health insurance provisions of the Patient Protection and Affordable Care Act (colloquially known as "Obamacare").
Other posts have been devoted to helping you determine if the notice you received is a real one sent by the IRS or if it is a "phishing" or "spoof" message sent by a scammer. One key way to know if a communication is the real deal is the method by which it was sent. Did it come via email or social media? It's fake. No question about it: the IRS does not communicate electronically with taxpayers. Did you receive a phone call from someone (other than your licensed tax preparer) alerting you that you owe additional taxes? The IRS doesn't do that, either. The person on the other end of the line was trying to get you to reveal sensitive bank account or credit card information.
This year's trending scam involves fake CP2000 notices. The IRS actually does use CP2000 notices when it finds there is a mismatch between the income or payment information it has on file and what a taxpayer reported on a tax return. Sometimes, these notices are just a "heads-up" to the taxpayer, and no additional tax is owed. They could even result in a refund. Remember: you don't always get notices from the IRS just because they are coming after you for more taxes. Sometimes they get to share good news that you are actually due a refund!
Knowing the difference
Real CP2000 notices will always come via U.S. mail. They will never be delivered electronically via email, social media or fax. They will contain detailed information about mismatched information provided on a tax return versus what was reported by a third party. For example, your employer-issued W-2 form (that was duly reported to the IRS) may have shown your annual income as $45,927. When you were filling out your tax return, however, you inadvertently entered $54,927. That disparity is significant enough that it could have resulted in your having to pay additional taxes. You could receive a CP2000 notice to say that you are now due a refund because the IRS has caught the mistake and realized you didn't owe those taxes after all.
Legitimate CP2000 notices will also contain either a "notice response form" or detailed instructions about what steps you will need to take next. They will also contain at least one toll free phone number for an IRS service center where you can speak to someone to get more information about the notice you received. In addition, real CP2000 notices will ask you to direct any payments to the United States Treasury at a designated tax payment processing center closest to you, not to the "I.R.S." courtesy of a PO box in Austin, Texas (like the most popular fake notices).
If you have any questions about a notice you received that appears to be from the IRS, contact an IRS service center near you to inquire before you send any money directly. Once you have determined that you have indeed received a real notice from the IRS and may need legal help to deal with a legitimate tax issue, contact a trusted and experienced tax attorney for assistance.