It seems that tax fraud and scams have no off-season. At all times of the year, a smooth and convincing scam artist may call you and inform you of an IRS repayment due immediately or of a tax audit with your name on it. Understandably cooperative and a bit fearful, you may then offer up any information or money to clear your record and settle any outstanding debts with the IRS. In return for your cooperation, these scammers will then use that information to give you and your relatives many hours of mass social engineering attacks, data collection attempts, and collection calls. In this post, we will discuss some of the common attacks that are used by scammers to trick you and show you how to spot the fakes. It is obviously important to be aware of the various attacks that are used by scam artists so you can protect your personal information and your money.
“Health Coverage Gap” Scam
An “official” IRS letter will arrive in the mail informing you that you are being penalized for not having health coverage for a certain number of months within a tax year. The letter will demand that you mail your payment for the missing months of coverage immediately to an address given in the letter.
What you need to know
- The letter appears to be issued from an address in Austin, Texas.
- A payment voucher number is listed on the letter as “105C” or a similar format.
- Requests for payment direct you to mail it to the “IRS” at a P.O. Box in Austin, Texas.
Solicitation of W-2 Information from HR Departments Scam
This scam is one of the more brazen scams and is intended for companies and tax preparers, rather than individuals. Basically, the scam artist(s) will pretend to be a corporate official (usually one with believable reasons for requiring W-2 information) and convince the HR representative or tax preparer to send or divulge the federal tax information (FTI) or personal information of their clients or employees to them.
What you need to know
While larger companies typically have security teams who are aware of the latest security threats, small businesses may have a hard time staying current with the new threats and phishing strategies. For this reason, it is important to keep your employees informed and prepared for recognizing various social engineering attacks.
As a company or tax preparation agency, you should report all suspected successful scam incidents to the FBI and the IRS.
“Official” Calls Or Emails From the IRS
There are many variations of this scam, but the basic idea is that a scammer (or scammers) will call or email you, posing as an IRS employee and, if on the phone, cite their badge ID to you. One convincing part of this routine is that these criminals will spoof your caller ID so they appear to be really calling from the IRS. After giving you their phony badge number, they will harshly claim that you are guilty of tax fraud or have “miscalculated” your taxes and demand you pay immediately to avoid losing your driver’s license, being arrested, or any number of drastic actions.
What you need to know
While these emails and calls have many variations, the idea behind all of them is to make you act before you think through what is happening in the email or call. Remember to think carefully before doing anything on a suspicious call.
Know Who You’re Talking To…
- The IRS will always contact you by mail. Learn more on the IRS website.
- The IRS will instruct you to make payments to the US Treasury. Find more info about payments on the IRS website. (https://www.irs.gov/payments)
- While the IRS may arrive at your house unannounced, they may not demand immediate payment from you
- If they do assign a private collection agency to your case, they will give you written notice if one is even assigned to your case. Legitimate debt collection efforts will never demand payment on a prepaid card or gift card, but will always direct you to pay the U.S. Treasury, not the agency. Find more information on the IRS website. ( https://www.irs.gov/businesses/small-businesses-self-employed/private-debt-collection)
- IRS auditors may call to set up a meeting with you, but you will have been notified in writing beforehand of the audit. Visit the IRS website to earn more about auditors. (https://www.irs.gov/newsroom/how-to-know-its-really-the-irs-calling-or-knocking-on-your-door-audits)
- For legitimate criminal investigations, the investigator may unexpectedly arrive at your home, but will never demand payment. For more information about IRS investigations, learn about what occurs in an IRS investigation (https://www.irs.gov/compliance/criminal-investigation/what-criminal-investigation-does) and how the beginning stages. (https://www.irs.gov/compliance/criminal-investigation/how-criminal-investigations-are-initiated)
- For a more comprehensive list of IRS scams, visit the IRS website. (https://www.irs.gov/newsroom/tax-scamsconsumer-alerts)