Did you know that in 2021, more than 8 million people owed back taxes to the Internal Revenue Service?
If you’re one of them, we know you want to get rid of your tax debts. You might receive calls from someone claiming to be from the IRS, but are they legitimate?
We don’t want you to believe scammers, so we looked into official IRS sources to understand how its debt collection process works. We also looked into the latest tax debt call scam tactics that criminals use and read articles on how to protect yourself against tax scams.
Below, we shared the top tip on how to avoid tax debt scam calls. Read until the end to avoid missing out on the latest tactics that scammers do to trick you and lose your money.
How do tax debt scam calls happen?
It’s scary to have federal tax debts, and scammers found a way to exploit this through tax debt scam calls.
Here’s how the IRS scam phone calls work:
- Fake companies and law firms call you and pretend to be accredited by the IRS.
- They may also impersonate IRS agents and claim that they know about your debt.
- For verification, scammers will request personal information, such as Social Security Number (SSN) or bank account details.
- They may also ask for confidential documents, claiming that the IRS needs those. But in reality, they wish to commit identity theft and other fraud.
- They deceive you into paying a high upfront fee to drastically reduce your tax debt.
- The fraudsters may also claim to eliminate your interests and penalties.
However, the scammers will never forward your documents to the IRS. After collecting the fees, they’ll say that you no longer qualify for the tax debt relief program or that the IRS rejects your request.
In the end, the fraudsters will refuse to refund your advance fee, saying that it’s non-refundable and they can’t do anything with your request.
But we found out that the IRS will only call you if you owe a significant amount of tax debt, or they’ll conduct a field audit.
So how does the IRS contact you if there is a problem? Here’s the actual collection process of the agency:
- The IRS will send a bill if you don’t pay the tax in full.
- You’ll receive a letter of notice that states and explains the balance due. It also includes the amount of tax, penalties, and interest.
- If you can’t pay the total amount, you may request a payment plan through the Online Payment Agreement (OPA) page. You may also submit Form 9465 or the Installment Agreement Request. There’s a small user fee when applying for an installment agreement. The IRS even offers reduced fees for low-income taxpayers.
- If you can’t pay on an installment basis, you may apply for an Offer in Compromise (OIC). It allows you to settle your debt less than the full amount you owe to the IRS.
- You may also request that the IRS delay collection of your debt. The IRS will require you to answer the Collection Information Statement, which you can access on the official IRS website.
So does the IRS forgive tax debt? Yes, it does through the Offer in Compromise (OIC). As you may notice, the official collection process and the tax debt relief scams have glaring differences.
Scammers require you to pay a high upfront fee, while the IRS only asks for a small amount when you apply for the installment basis.
They also communicate with you through phone calls while the IRS sends you letters of notice regarding your debt.
Fraudsters may also pose as members of a tax health center that can help you eliminate your debts, but the IRS requires you to submit several documents to determine your eligibility for the OIC.
Based on the said differences, these are the warning signs of tax debt scam calls:
- Scammers demand high payment, which is non-refundable, so you don’t have any recourse when the IRS won’t “approve” your application.
- They pledge to eliminate your entire debt and its interest or reduce it drastically.
- Fraudsters call you instead of writing a letter first, which the IRS does.
- They ask for your SSN, credit card details, and bank account information to further verify your identity.
- They request the same documents repeatedly to delay the process and ask for more money from you.
- They fail to explain your tax debt, yet they claim to know the amount you owe to the IRS.
It’s important to take note of these warning signs. Recognizing them is one of your first lines of defense against tax debt scammers.
What to do if you get a scam call from the IRS?
The IRS has an official tax help center you can call if you get a scam call.
- Take note of the number before hanging up.
- If you don’t owe taxes to the IRS, report the incident to the Treasury Inspector General for Tax Administration (TIGTA) by completing the IRS Impersonation Scam Reporting form. You may also call 800-366-4484.
- Send an email to [email protected] and type “IRS Phone Scam” under the subject line.
- You may also report the fraud to the Federal Trade Commission (FTC) and add “IRS Telephone Scam” to the comment box.
You can help these government agencies stop identity theft cases and tax debt scams by reporting the fraudulent call.
But what if you really owe the IRS money?
There are times when scammers call their primary targets or those who have tax debts.
Here’s what you can do when you have back income tax debt and receive calls from an unknown number.
- End the call immediately.
- Sign in or create an account on the official IRS website to view your tax records, including debts and payment plans.
- Contact the IRS at 1-800-829-1040 to verify or report the call.
According to the IRS, their agents only call taxpayers with large debts. Also, they’ll contact you if they need to do a field audit.
What are other tax debt-related scams?
Aside from the IRS fraud phone calls, you must also be aware of the following tax-debt-related scams:
Fraudsters may send emails with links that redirect you to an official-looking IRS website. They may also include attachments that can infect your gadgets with viruses and malware.
As a result, hackers can collect your information, including the username and password of your IRS account.
The IRS also received reports of scammers sending text messages claiming to be from the agency. These SMS contain malicious links, so hackers can infiltrate your device and get sensitive data when you visit the website.
Social media scams
Almost everyone has a social media profile, so it’s not surprising that fraudsters use Facebook, Twitter, and other social networking sites to commit tax debt-related scams.
They may impersonate IRS employees and tell you they can help reduce your debt and eliminate your interests and penalties.
Scammers use almost any method to communicate with their target victims and offer tax debt relief. You must be wary of strangers who call or send unsolicited texts, emails, and social media messages.
How to protect yourself against tax debt scam calls?
Scammers may give you a false sense of hope, but believing in them will cost you hundreds of dollars and a stolen identity.
Below are practical tips on how to avoid becoming a victim of tax debt scam calls.
1. Hang up immediately
Don’t trust calls claiming to be from the IRS because when you have tax debts, they’ll send you a letter of notice first. The IRS will only call you in exceptional circumstances, not as the first step in its collection process.
2. Don’t provide sensitive information and documents
In case you already talked to the caller who pretends to be an IRS agent, never give confidential information, including your SSN and credit card details.
You should also refrain from sending documents because it allows scammers to commit identity theft once they have your papers.
3. Report to the IRS
Once you receive scam calls, we recommend forwarding the number to [email protected] and putting “IRS Phone Scam” under the subject line.
Your report helps government agencies put an end to the scammers’ fraudulent acts. By reporting to the IRS, you’ll also receive fewer to no calls from fraudsters.
4. Ask for identification
If someone claims to be an IRS agent, ask for that person’s name and Enrolled Agent Number.
If the caller fails to give the said information to you, chances are, a scammer is targeting you.
You may also verify the caller’s identity by emailing [email protected]. Until then, don’t give out any personal information.
5. Create an IRS account
You can easily monitor your tax records at https://www.irs.gov/, but you must create an account first.
Type your email and password, then follow the prompts on the website. This way, you can verify your tax debt, penalties, and interests without relying on a stranger.
We recommend following the suggestions above to protect yourself against scam callers.
Is it possible to avoid tax debt scam calls?
Scammers may employ various tactics to deceive you, especially if you have tax debts, but it doesn’t mean you can’t protect yourself from them.
Once you get a call from someone claiming to be an IRS employee, hang up immediately. It’s the best way to avoid this type of scam.