Latest IRS scam tricks and how to repair the damage they cause: Internet Scambusters #666
IRS scams are one of the fastest growing crimes in the United States, with hundreds of thousands of victims every year.
Basic steps can limit the risk of being caught out, but what should you do if you've already lost money or your IRS tax records have been compromised?
We'll give you the answers in this week's issue -- together with a warning about credit card refunds.
Let's get started...
What to Do If You're an IRS Scam Victim
IRS scams have become one of the fastest growing con tricks of the past couple of years.
The most common trick, which happens all year round, not just during the filing season, is an imposter scam in which the crook phones or texts victims pretending to be an IRS agent, often giving a fake IRS "badge number," and demanding immediate payment of an unpaid bill.
Most recently, they've been emailing bogus IRS CP2000 Notices, saying the recipient has been audited and now faces a Final Demand for payment.
The crooks use threats of police arrest and jail to intimidate victims into paying up fast -- usually by money transfer or prepaid debit cards.
Remarkably, the fraudsters have even tried scamming Canadian citizens in the misplaced belief that Canadians have to file tax returns with the IRS -- that's in addition to other scammers posing as officers of Canada Revenue Agency (CRA).
Today's other big tax scam involves identity theft, in which crooks pose as individual taxpayers and file fraudulent refund claims.
This hits a peak in the early months of the year but victims often don't find out about it until much later.
In total, tax scam complaints to the U.S. Federal Trade Commission (FTC) leapt twenty-five-fold -- to 55,000 -- last year, becoming the biggest single category of complaint.
The U.S. Treasury says more than 400,000 people filed IRS scam complaints in the past couple of years. And the Treasury Inspector General for Tax Administration (TIGTA) says 10,000 new scam calls are made every week.
Avoiding the Scams
So, what can you do to avoid these scams or put things right if you're already a victim?
Avoiding the "pay-up" scam is simple.
The IRS does not use the phone or even email to notify people if they owe taxes -- and it doesn't request money-wire transfers or debit cards for payment.
Also it doesn't threaten people with arrest or revocation of their driver's license.
Furthermore, it doesn't request payment of an outstanding bill without offering taxpayers the opportunity to appeal the bill.
So hang up on any callers who use these tactics, and ditch the threatening emails. If you're worried the contact might be genuine or that you might owe money to the IRS, check with them on 1-800-829-1040.
Avoiding identity theft tax fraud is a more difficult matter.
Yes, you should protect confidential information like your Social Security number but there are so many instances these days of data theft from other sources, it's impossible to be sure the crooks haven't gotten their hands on your details.
The best you can do is to be alert to the risk.
What to do if you're a victim
If the worst happens, here's what you should do.
* If you receive a letter from the IRS saying two (or more) returns have been filed in your name or that your identity has been stolen, call the number in the letter.
But be sure the letter is genuine. You may have to give a reference number or some other identifying information but you won't have to give your SSN -- so don't.
If you're not sure if it's genuine, call the number in the paragraph below.
* If you know or suspect you may be the victim of tax ID theft but haven't received a letter, call the IRS Identity Protection Specialized Unit on 800-908-4490.
They'll take details and tell you what to do next, which will probably involve downloading and completing an Identity Theft Affidavit.
That should be sufficient to straighten out your IRS record -- it usually takes a couple of weeks -- but since your identity details have obviously been stolen, don't forget to take other precautions including checking with the credit reporting agencies.
For more on this, see this earlier Scambusters issue: What to Do if You Become the Victim of a Stolen Identity: A Scambusters Special Issue.
If you're still concerned or you're unhappy with the IRS response, or if you're in financial trouble as a result of the scam, you can contact the Taxpayer Advocate Service, an independent unit within the IRS.
Your state should also have a Taxpayer Advocate who might be able to provide additional advice. Use this interactive map to find your local advocate.
The important thing to remember is that if you're an IRS scam victim, repairing the damage is every bit as important as trying to recover the money you might have lost.
Alert of the Week
The Consumer Financial Protection Bureau (CFPB) is warning Citibank customers about scammers who offer to help victims get a refund from the bank.
The con trick follows hard on the heel of news that the CFPB has ordered Citibank to refund $700 million to customers for what the Bureau calls deceptive credit card practices.
People entitled to a refund will get a check or credit directly to their account.
"Watch out for scammers claiming they will get you a refund," the Bureau says.
"If someone tries to charge you, tries to get you to disclose your personal information, or asks you to cash a check and send a portion to a third party to claim your refund, it's a scam."
Time to conclude for today -- have a great week!