This week’s blogger is Raymond G. Russolillo, CPA, tax partner and leader of Withum’s Family Office service niche.
I guess physical house robberies and street muggings are too risky for criminals these days. Over the past couple of years, an entire cottage industry of IRS scammers has sprung up whereby telephone “solicitors” call unsuspecting taxpayers and threaten them with legal action if they do not pay their back taxes immediately. A number of my clients have received such calls and were, to put it mildly, shaken up by the whole experience.
Here’s the deal – we all know that the IRS is a huge, unwieldy bureaucracy that is very easy to criticize and ridicule and just as easy to fear. As an institution, it is far from perfect. But, the one thing IRS really knows, and lives by, is PROCEDURE! There are time constraints and notice requirements and all kinds of legal processes procedures in place to protect both the taxpayer and the taxing agency. And the bottom line is, procedure dictates that IRS not shake down taxpayers by telephone! If the IRS is truly “after” you, you will know because they always make first contact by mail. The telephone may be used to communicate with you once you are in the audit process, but any settlement offer, assessment, or bill will always be delivered to you on paper, not by an angry, demanding phone call.
Scammers rely on taxpayers’ ignorance of procedure and fear of government agencies. Don’t be so easily fooled. Knowing the rules the IRS lives by will enable you to spot a scam and nip it in the bud. The IRS will never:
So, what if you receive a call from a scammer? First of all, stop, take a deep breath….and do nothing. End the call. If you receive a voice mail message, you may want to save the recording, particularly if you plan to report the incident to the authorities. If you have some doubt about the legitimacy of a call (under the theory that “where there is smoke there is fire” – perhaps you received a letter that you ignored or forgot about), you should immediately contact your tax advisor for assistance. At the very least, you can contact the Internal Revenue Service yourself at (800) 829-1040 to see if there are any open tax items you may have neglected to address. But, if you know you owe no taxes or you are unaware of any issues in dispute, you may want to consider reporting the incident to the Treasury Inspector General for Tax Administration (TIGTA) at (800) 366-4484 or at www.tigta.gov. You can also file a complaint using the FTC Complaint Assistant; choose “Other” and then “Imposter Scams.” Include the words “IRS Telephone Scam” in the notes.
Finally, regarding other forms of communication, it is safe to say that the IRS is not even in the 21st century yet. They do not use unsolicited e-mail (which itself is so 20th century), text messages, or any kind of social media to discuss your personal tax issues.
You know the old saw about “a fool and his money are soon parted.” Don’t let fear and ignorance make you that fool.