Don’t Let Scammers Scare You During Tax Season

Some of the most common and successful scams involve pouncing on you in a situation where you’re already tense and nervous. Scammers may manufacture a crisis, using AI to impersonate a family member in distress. But the easiest thing for them to do is to try to take advantage of you in a situation where you’re already on edge. And who isn’t just a little bit afraid of the Internal Revenue Service (IRS)? Even if you’re entirely on the up-and-up, you probably always have it in the back of your mind that an honest mistake, omission, or an unexpected audit will reveal a costly mistake. 

The Federal Trade Commission has seen an increase in scam calls claiming that people owe taxes. The scam often happens in two parts. The first call claims to be from a branch of the IRS saying you owe back taxes plus some heavy interest and penalties. The scammer then offers to connect you with someone else who can help with tax debt relief. Those people will demand money, either for the fictitious debt, or for their services to help you evade the debt. 

First of all, the IRS will always initiate any communication by mail. If you get a phone call, email, or text from the IRS it is a scam. (There may be some situations where you’re already in contact with the IRS about a known issue when a representative will call you, but you will always get first notification of a tax problem by mail.) But even a letter could be a scam. If you get a call, email, or text claiming to be from the IRS, ignore it and delete it. If you get a letter from them and have any doubt that it is real, call their main help line at 800-829-1040 or visit www.IRS.gov to find out if the contents of the letter are legitimate.

Remember, the IRS will never ask you to pay for anything with cryptocurrency or gift cards. If they threaten to “cancel your social security number” or arrest you, you know it’s a scam. While people can be arrested for tax fraud, you would get plenty of notification to clear up any errors first. Scammers hope you’ll be scared enough to do whatever they say without stopping to think.

Then there are actual tax relief companies which may not be scams per se, but which are often misleading, taking your money without giving you any help you couldn’t get on your own simply by calling the IRS. The companies promise to negotiate with the IRS on your behalf and say they can reduce or eliminate your debt, or even stop a current collection. But only the IRS can negotiate with you about what you owe. The tax relief companies make promises they can’t keep, all with one goal – getting you to pay a hefty fee for their services. You pay them, and instead of being debt free, you end up owing even more.

If you know you’re in trouble with the IRS – if you currently owe money, or know you can’t pay upcoming taxes – the best thing to do is contact them directly. You may be able to set up a payment plan, or in some cases an offer in compromise where they agree to accept less than what you owe. Taxes can be scary, but don’t let your anxiety make you fall victim to a scammer or an unscrupulous business.