Shutdown Gives Tax Scammers New Opportunities To Steal -

Being pursued by the Internal Revenue Service for outstanding tax liabilities can be stressful.

Being pursued by the fake Internal Revenue Service is even worse.

Scammers are increasingly capitalizing on the fears of taxpayers in order to illegally obtain personal and financial information. These scammers realize that, with an arsenal of collections weapons at their disposal – from liens to bank levies to wage garnishment – the IRS can be pretty intimidating. And effective. Using those same threats, scammers pose as IRS representatives seeking to collect back taxes.

For the last couple of years, I've mostly seen this in the form of emails. Until last week.

A client – who legitimately owes the IRS a bit of money – contacted me on Friday to let me know that he had received a phone call from someone purporting to be from IRS. He didn't speak to the caller about the specifics of his case and instead, did the right thing, and called his tax professional.

I was immediately suspicious for a few reasons:

• One, the IRS is shut down. While they are accepting payments, the IRS is not currently staffed to be following up on taxpayer collections.
• Two, the client is represented by counsel (that would be me). I have a Power of Attorney on file for taxpayer for the years in question. And while it’s not out of the question for IRS to contact client without my knowledge, the IRS is generally pretty good about extending notice for collections activities to agents with appropriate authorizations.
• Three, notwithstanding the “blip” that is the shutdown, we are currently negotiating with IRS on taxpayer’s behalf. Typically, when you’re negotiating an outstanding tax liability, collections activities are on hold.
• Finally, IRS is nothing if not dedicated to process. There are procedures when reaching out to taxpayers about liens, levies and other collections activities – notice is essential for IRS to seize wages, accounts or other assets. That generally happens by certified mail. A phone call is not sufficient notice prior to seizure.

So clearly, my curiosity was piqued.

I decided to call the “IRS” back on behalf of client. The contact at the number – in the 530 area code – had originally identified himself as “Kevin Peterson” to my client. When my office dialed the number, the person who picked up answered, with a heavy accent, “IRS.” When pressed, we found out that “Kevin Peterson” was apparently not available but we were asked for information about the taxpayer. When we asked questions about the call, the “IRS” hung up. Subsequent calls were not picked up.

I contacted folks at the IRS (Criminal Investigations remains open during the shutdown) who advised that impersonation schemes such as this one are matters for the United States Treasury Inspector General for Tax Administration (TIGTA). I have a few calls into TIGTA about this specific issue but in the interim, I did a bit of digging.

It turns out that there are a number of complaints about this very scheme. While the kind of scheme is not new (despite the fact that I haven’t encountered it before), the frequency of these calls has increased dramatically over the past few weeks. Why now? Easy: the government shutdown.

Normally, if you are concerned about the legitimacy of a call, the IRS advises you to contact the IRS at 1.800.829.1040 to verify whether the call is legitimate. We’re on day #14 of the shutdown which means that the IRS is not answering the phone. That gives scammers increased opportunity to pressure taxpayers without fear of getting caught – at least immediately.

The calls have a few traits in common. Most seem to be from 530 but have the feel of a VOIP call – and may sound like a call center. Most of the callers have heavy accents (my client had advised that “Kevin Peterson” had a thick accent and the person who answered the phone had an accent that sounded vaguely Indian). The name “Kevin Peterson” has been used quite often but other names have included “John Miller” and “Chris Brown” (no, not this Chris Brown).

And here’s what the scammers are doing: they are asking taxpayers to confirm personal information including name, Social Security number and address. In some cases, they are asking for copies of forms W-2 and forms 1099 to “verify” income and brokerage accounts. Depending on how forthcoming taxpayers have been, some have been asked for bank account information (allegedly to debit payments) and credit card information. When taxpayers refuse, the phone calls persist and threats intensify. In some instances, taxpayers have been threatened with visits from the sheriff, jail time and bank levies.

Recently, taxpayers in New Jersey, Missouri and California have been scammed out of hundreds of thousands of dollars in these schemes. Taxpayers have been pressed into divulging bank information and loading money onto Green Dot MoneyPak cards to pay off tax liabilities. In some versions, callers appear to have targeted immigrants, threatening to contact immigration officials if the “taxes” are not paid.

If you receive a phone call allegedly from IRS and you believe it to be a scam, don’t give out any personal information. While a legitimate phone call from IRS might ask you to verify some information, the IRS will never ask you for PIN numbers, passwords or similar access information for credit card, bank or other financial accounts.

The best thing to do is simply take a message – ask for a call back number and employee badge number – and then contact the IRS at 1.800.829.1040. Again, I realize that we’re in a government shutdown right now. If you need to contact IRS, you can hang tight until the lights are back on. Even if you do owe money and it is a legitimate call (though the odds are slim), the IRS has indicated that they are not issuing liens or levies while the government is shut down.

If you've been threatened with physical harm, you should also contact the police.

You can report the scheme to TIGTA by calling 1.800.366.4484, going online and filling out a complaint, or sending an email.

And let’s be careful out there: just because the government is shut down doesn't mean the bad guys aren’t working either.

Questions? Don't hesitate to call us. We're here to help!

Security Tax Services LLC

North Sound                                       South Sound

2802 Wetmore Ave, Suite 212           33530 1st Way S, Suite 102

Everett, WA 98201                             Federal Way, WA 98003

425.339.2400                                     253.237.0751

fax 425.259.1099                               fax 253.237.0701

www.securitytaxservices.com