Be a Smart Taxpayer: Know How to Spot a Scam

The IRS has been plagued with scammers preying on taxpayers by impersonating the IRS. These fraudsters will contact an individual and threaten to take action if they do not immediately pay. Tens of thousands of people have fallen prey to this scam, and anyone is vulnerable to it. They take great strides to appear like the IRS, convincing many savvy taxpayers. To make matters worse, the IRS is handing some of their debt to private tax collection agencies. Be smart and do not fall prey by knowing how to spot whether or not any correspondence from the IRS is a scam.

The IRS Does Not Email, Text, or Call

Unless you already have a relationship with a certain agent, the only official correspondence you will get from the IRS by and large will be an official letter through the mail. Even when your debt winds up in the hands of a private tax collection agency, the IRS will initially inform you through the mail. Some scams do start by sending out a very authentic looking letter in the mail as well. If you are unsure whether it is a legit letter, then look up the number to the official IRS and call to enquire about your account before you take any action on the letter.

You Do Not Have to Pay Right Away

The IRS always gives you a grace period before they take action. Typically, you have 30 days in which to contest a debt, make payments, negotiate a settlement, or otherwise act before the IRS will take collective action. For example, your first letter will simply be a bill with a deadline in which you must pay. Then, you will receive a letter threatening in a lien, but you will still have time to appeal or take action before it starts. During every step of the process, you have a chance to act before anything happens. This is in stark contrast to scams. They often will threaten action if you do not pay immediately.

You Will Not Go to Jail

Some scammers really put the fear into taxpayers by threatening to take them to jail. Not paying your taxes is not a criminal act, so you cannot end up in jail. Technically, not filing your taxes is a criminal offense, but by and large the IRS only takes criminal action against those who commit outright fraud. When this happens, you might be arrested, but you will still have a chance to make your case in court before everything is settled.

You Can Pay Your Taxes In Several Ways — And Gift Cards Is Not One of the Them

The IRS has many different ways to pay your tax debt, including check and credit cards. They also let you set up an Installment Agreement to pay it out over time. What they do not let you do is pay by gift cards. They also do not force you to pay right away over the phone or online. You can send in payment by mail or pay online. If any letter, email, or phone call tells you that you have to pay immediately, it is a scam. And if they try to tell you that you can or should pay via gift cards, know that it is not the real IRS contacting you.

These are the main ways to know whether or not what appears to be communication from the IRS is actually a scam. Never negotiate with scammers. Hang up the phone, delete the email, or throw away the letter. Better yet, report the scam. If you are afraid that you might actually owe money but are not sure if the communication is legitimate, contact the IRS. However, do not use any of the contact information on the letter just in case. Go to the official IRS website (www.irs.gov) and look for a number. You can also work with tax professionals, who are experts on spotting a scam and helping you to reach a settlement when you do owe money.

Mike Wehner

Mike has been an enrolled agent and tax preparer for over 18 years and is intimately familiar with the Tax code and best practices to resolving tax debt.

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