The IRS is the agency responsible for collection of tax and enforcing tax laws. The IRS is the largest and most powerful government and collection agency in the US. The IRS can seize the money in your bank, including investment and retirement accounts. Even after seizing your home and personal property, the IRS can garnish your pay. Dealing with the IRS can be scary, and rightly so!
When necessary, the IRS contacts taxpayers by sending letters and written notices, making in-person visits, and (less frequently) by phone. The IRS does NOT contact people via email or social media to obtain financial or personal information. Any contact from the IRS can cause a tremendous amount of stress. After all, if the IRS has gone to the expense to contact a taxpayer, it must have a good reason to do so.
Through the years I have received numerous questions from taxpayers who received phone calls from callers claiming to be from the IRS. According to the IRS, it will contact a taxpayer by phone regarding an overdue tax bill, to secure a delinquent tax return or a delinquent employment tax payment, or to tour a business as part of an audit or during criminal investigations. Before any IRS employee calls a taxpayer, the taxpayer should have already received letters or notices from the IRS. The IRS may also contract with a private collection agency to attempt to collect tax debt. These private collection agencies may call a taxpayer on behalf of the IRS.
However, there are many people who attempt to capitalize on the IRS’ intimidating power by impersonating the IRS (or a private collection agency who contracted with the IRS) to fraudulently obtain personal information and/or money from taxpayers.
If a person claiming to be from the IRS (or from a private collection agency that has contracted with the IRS) calls you, I suggest that you take the following steps:
- Stay calm. If the caller is trying to perpetrate a scam, he or she will likely try to scare you by being aggressive and hostile. The caller may state that the FBI or the local police will be coming to arrest you. If the caller makes this threat to you, you now know it is a scam. The IRS will not threaten to immediately have you arrested for not paying your taxes;
- Get the caller’s information. The IRS requires its employees to provide their name and badge number to taxpayers and their representatives. If the caller will not readily provide this basic information to you, he or she is either violating the IRS’ policies or is attempting to perpetrate a scam upon you. Also record the phone number reflected in your caller id;
- Take notes regarding the reason for the call and the caller’s phone number. If the caller on the phone is really from the IRS, they should have good reason to call you. Get that information; and
- Ask the caller to send a letter to your address of record regarding the reason for their call.
What NOT to do when a caller claims to represent the IRS:
- Do not provide any of your personal information to the caller. The caller may ask you to verify your Social Security number in order to confirm your identity. The caller may be requesting this information for identity theft purposes; and
- Do not follow any instructions provided by the caller regarding how to send funds to the IRS without speaking with a professional. If the caller demands you obtain a gift card and provide the code(s) on the back of the card, or if the caller instructs you to make a wire transfer to pay tax debt, it is surely a scam. If you do need to make a payment to the IRS, you can do so in a secure manner that does not involve gift cards. If a caller claims to be from a collection agency that is trying to collect a tax debt, he or she should ONLY be requesting that you make payments directly to the United States Treasury.