IRS tax scams are on the rise, and they come in many forms. Some are easier to spot than others, but knowledge is the key to protecting yourself. This hoax or scam comes in a variety of different forms, including: standard form letter, email, or phone call. The end goal for all of them is the same, which is to steal your identity and your money. This article is specifically targeted at showing you how to protect yourself from those who claim they are from the IRS, but in reality are not.
IRS Taxpayer Bill of Rights
It all starts with the IRS Taxpayer Bill of Rights. These describe what to expect from the IRS and its agents. It is a guide to help you identify whether or not you are communicating with an actual IRS agent or an impostor. There are ten rights which are described below.
1) Right to Be Informed
Taxpayers have the right to clear explanations of tax laws and IRS procedures in all tax forms, instructions, publications, notices, and correspondence. They have the right to be informed of IRS decisions and to receive clear explanations of the outcomes. A tax scam often uses vague, demanding, or confusing language to get you to cooperate.
2) Right to Quality Service
Taxpayers have the right to receive prompt, courteous, and professional service when communicating with the IRS, and to speak to a supervisor about inadequate assistance. If you feel like you are being rushed or misdirected, ask for a supervisor. If they refuse, or if their “supervisor” continues to push you, then you are not communicating with the IRS.
3) Right to Pay No More than the Correct Amount of Tax
The IRS does not create tax law. It administers the law. Taxpayers have the right to pay only the amount of tax legally due, including interest and penalties, and to have the IRS apply all tax payments properly. The IRS must be able to demonstrate in writing how it calculated any tax due.
4) Right to Challenge the IRS’s Position and Be Heard
Taxpayers have the right to challenge and respond to any decisions made by the IRS. They can provide any additional documentation that may affect the outcome.
5) Right to Appeal an IRS Decision in an Independent Forum
Taxpayers are entitled to a fair and impartial administrative appeal of most IRS decisions, including many penalties, and have the right to receive a written response regarding the Office of Appeals’ decision. Taxpayers generally have the right to take their cases to court.
6) Right to Finality
Taxpayers have the right to know the maximum amount of time they have to challenge the IRS’s position as well as the maximum amount of time the IRS has to audit a particular tax year or collect a tax debt. Taxpayers have the right to know when the IRS has finished an audit. In general, an IRS audit can go back three years. There are a few exceptions and situations in which they can go back further. Also, once both the taxpayer and the IRS agree to an IRS decision about a specific tax situation, the IRS cannot reopen the case and modify its decision.
7) Right to Privacy
Taxpayers have the right to expect that any IRS inquiry, examination, or enforcement action will comply with federal law, and will respect all due process rights, including search and seizure protections. Due to disclosure requirements, initial contact with a taxpayer about a tax issue is made by phone call or regular mail. It is not done by email.
8) Right to Confidentiality
Taxpayers have the right to expect that any information they provide to the IRS will not be disclosed unless authorized by the taxpayer or by federal law. Taxpayers have the right to expect appropriate action will be taken against employees, tax return preparers, and others who wrongfully use or disclose taxpayer information.
9) Right to Retain Representation
Taxpayers have the right of Due Process. They have the right to take the IRS to court. They also have the right to have representation of their choice to advocate for them and to help them understand their responsibilities. Taxpayers have the right to seek assistance from a Low Income Taxpayer Clinic if they cannot afford representation.
10) Right to a Fair and Just Tax System
Taxpayers have the right to expect the IRS to consider facts and circumstances that might affect their underlying liabilities, ability to pay, or ability to provide information timely.
IRS Scam: Fake Letter
The IRS often sends an official letter as the first contact related to a tax issue. Within the letter are many indications of full disclosure, including a description of your rights, their expectations of you, how they determined the outcome, and how to contact them for any questions or concerns. If you are concerned about whether or not the letter is fake, contact a trusted friend who has some experience or look on the IRS.gov website for contact information.
IRS Scam: Email Phishing
With email phishing scams, they most likely have a link that takes you to a website that “looks” official. It will then ask you to login or give them personal information. They will often also ask for a credit card. All reputable financial institutions, such as Wells Fargo, PayPal, and the IRS, will provide standard contact information, such as a mailing address and phone number. They will never ask you to click a link to login, unless you recently requested information, such as a password reset. As with any email, if you are in doubt of its authenticity, do not open it.
IRS Scam: Phone Calls
The IRS may call you regarding a tax issue. They will never demand you to pay a tax bill by credit card over the phone. They do not have to. If the IRS does have a judgment against you, they can garnish your wages or take money from your bank account.
IRS Contact Information
Phone: 800-829-1040 (individuals)
Phone: 800-829-4933 (businesses)