Getting contacted by the Internal Revenue Service (IRS) can lead to a spike in blood pressure and a pounding headache. Adding to this stress is the fact that the contact may not even be legit. As such, it is wise to have a basic understanding of some of the common ways the agency will make contact and common red flags for a potential scam.
Two common ways the IRS contacts taxpayers
The IRS is pretty straight forward with its contact methods. Most often, the agency will contact taxpayers through the mail or with a phone call. The agency explains in a recent publication that these phone calls are often used to contact taxpayers that allegedly owe the agency in back taxes or to confirm an appointment to discuss an audit.
It is also important to note that the IRS recently chose to outsource some of its collection efforts. As a result, it is possible to get a phone call from a private debt collector working on behalf of the IRS. These collectors are required to follow the requirements set out in the Fair Debt Collection Practices Act.
The law has a number of expectations for how consumers are treated, including forbidding the use of threatening language. There are also strict requirements about payments. Generally, payments should be made directly to the IRS through the IRS.gov website or with a check to the U.S. Treasury mailed to the IRS. As such, any caller that is hostile or demands immediate payment by use of a debit card or other form of payment not outlined above is likely a scam.
On rare occasions, an agent may make a personal visit. These visits can either be scheduled or unannounced, depending on the purpose of the visit. Generally visits to discuss a tax obligation or scheduled while those that are part of an investigation are often unannounced.
Three red flags for fraud
Since the IRS is fairly predictable, there are three red flags that strongly indicate the person contacting you is part of a fraudulent scam. These include:
- Means of contact. The IRS has yet to initiate contact through the use of social media, emails or text messages. Any attempt to contact using one of these three means is likely a scam.
- Requested payment. As noted above, any request for payment that does not go directly to the IRS or U.S. Treasury is suspect.
- Lack of credentials. In the event of a personal visit, an IRS agent should be able to provide a pocket commission and a Personal Identity Verification Credential.
If the victim of a scam, it is wise to contact the Treasury Inspector General for Tax Administration to report the event.