What to Know to Protect Yourself From IRS Scammers

While the Internal
Revenue Service may not be your favorite federal agency, criminals posing as
IRS representatives are unquestionably a much bigger problem. Here’s what to
know to protect yourself.

Scammers set
increasingly treacherous traps for swindling taxpayers’ assets, identities, or
both. Favorite targets are those most likely to fall for the trickery and least
able to afford it:  older adults,
immigrants, and widows or widowers.

Even if you’re not
in any of these categories, don’t let down your guard. Tax scams can happen to
anyone. There was one time that scammers even called the home of the
commissioner of the Connecticut Department of Revenue Services, the state’s
head taxation official.

Real Versus Fake

The most popular
scam goes something like this: Someone claiming to represent the IRS or the
U.S. Treasury Department calls, texts or emails claiming that you owe money,
are in general tax-related trouble or must take some immediate action (usually
send them money) – or else.

Callers may also
know a lot about you: your name and those of family members, a portion of your
Social Security number or additional contact information. Often, scammers stole
such information via Internet phishing.

Differentiating a
fake IRS representative from the real deal may at first seem hard. One of your
key defenses: Know how the U.S. tax agency actually engages in legitimate
queries and, just as important, how it does not.

Five Actions the IRS
Will Never Take

If you defraud the
U.S. government, you may indeed incur fines, penalties, and, in extreme cases,
even jail time. None of these happens in an out-of-the-blue instant, though.

Here are five
actions the IRS will never take at the initial stages of a tax problem:

• Call
  to demand immediate payment or call about taxes you owe without first mailing
  you a bill.

• Demand
  that you pay taxes without giving you the opportunity to question or appeal the
  amount owed.

• Require
  you to use a specific payment method for your taxes, such as a prepaid debit
  card.

• Ask
  for your credit or debit card numbers over the phone.

• Threaten
  to bring in local police or other law enforcement to arrest you.

If you or a loved one receives a call involving any of the
above tactics, you can bet it’s a scam.

Your Best Responses

• Hang
  up. Just as you never politely converse with a burglar in your home or a thug
  on the street, there’s absolutely no need to stand on formalities here.

• Report
  the call. Notify the IRS to help prevent others from succumbing to the scam. If
  possible, note the caller’s number.

Unfortunately, for every tax scam averted, others pop up.
The IRS list of top tax schemes spans phone and Internet fraud to fake
documents and crooked tax return preparers.

To stay on top of the latest news, you can regularly visit
the IRS tax scam/consumer alert page or talk to your financial advisor with
questions and concerns.

We all benefit when
we stand together against tax scams.