According to the United States Treasury Inspector General for Tax Administration (TIGTA), U.S. taxpayers have reported more than $20 million in financial losses resulting from IRS scam artists since October 2013. About 4,000 individual taxpayers have been affected. During the same period, TIGTA received over 600,000 reports of taxpayers being approached by likely scammers.
Being tricked out of money is a disturbing reality for too many people, both American and Canadian. This article shares some of our recent experiences with attempted scams and provides some tips to help avoid them.
In recent years, the IRS has issued a number of press releases that serve as reminders and provide insight into the most recent attempts by thieves.
Recently, a Canadian resident client who filed in the U.S. for the first time was contacted via telephone about two months after submitting her documents. The caller identified himself as an IRS agent and informed our client that she owed taxes and penalties (which she did not), and that the fastest way to resolve the matter and avoid further scrutiny was to pay the outstanding bill immediately via credit card. Our client was confused and felt pressured to act, but fortunately she was cautious enough to call us before taking any further action.
Knowing the IRS does not normally request payments over the phone, we identified this call as a likely scam. But many Canadians who find themselves filing U.S. tax returns for the first time may be targets for these scammers due to their inexperience with the IRS.
A more sophisticated recent scam involved an unsolicited email purportedly from the IRS. The body of the email appeared professional, and included the IRS logo and proper font and layout. The email asked the client to complete a form that was specific to non-U.S. residents. At first glance, the form appeared legitimate. However, closer inspection revealed questions that are not included on the legitimate version of the form. The additional questions were the type that would normally be used to retrieve forgotten passwords and credit card information. It appeared to be a phishing scheme to steal an identity or credit card information, or both.
The IRS has several pages on its website dedicated to scams, and regularly reminds the public that notice of any amount owing to the IRS is always sent to the taxpayer via mail. According to a recent IRS press release, the IRS will never:
1) call to demand immediate payment, nor will the agency call about taxes owed without first having mailed you a bill;
2) demand you pay taxes without giving you the opportunity to question or appeal the amount it says you owe;
3) require you to use a specific payment method for your taxes, such as a prepaid debit card;
4) ask for credit or debit card numbers over the phone; or
5) threaten to bring in local police or other law-enforcement groups to arrest you for not paying.
What should you do if you are contacted unexpectedly by someone claiming to be the IRS? The IRS suggests you refuse to provide any personal information and hang up immediately. Do not respond to any emails where the sender claims to be the IRS. You can submit a report to the TIGTA and/or the Federal Trade Commission via their respective websites to advise the agencies of your experience. Finally, you can always contact your U.S. tax professional to assist you in determining the legitimacy of the correspondence you have received.
Unfortunately, this is an issue we see on an increasingly frequent basis, and it is important that all individuals be vigilant to avoid becoming victims.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
