Clients who get scam phone calls from parties claiming to be the IRS demanding immediate payment are often calling advisers in a panic after such a call. While we will assure them that the IRS doesn’t handle these issues the way the caller they talked to is suggesting, we can now also point them to an IRS document regarding what the IRS will and will not with regard to a tax issue.
In Fact Sheet FS-2018-12 the IRS describes how the agency does and does not contact taxpayers.
The sheet notes that normally the IRS will not contact taxpayer by phone or a visit to the taxpayers’ home. But it does note:
However, there are special circumstances in which the IRS will call or come to a home or business, such as:
- When a taxpayer has an overdue tax bill,
- To secure a delinquent tax return or a delinquent employment tax payment, or
- To tour a business, for example, as part of an audit or during criminal investigations.
Even then, taxpayers will generally first receive a letter or sometimes more than one letter, often called notices, from the IRS in the mail.
The notice goes on to outline some things that scammer often demands, but which the actual IRS will never do:
- Demand that people use a specific payment method, such as a prepaid debit card, gift card or wire transfer. The IRS will not ask for debit or credit card numbers over the phone. For people who owe taxes, make payments to the U.S. Treasury or review IRS.gov/payments for IRS online options.
- Demand immediate tax payment. Normal correspondence begins with a letter in the mail and taxpayers can appeal or question what they owe. All taxpayers are advised to know their rights as a taxpayer.
- Threaten to bring in local police, immigration officers or other law enforcement agencies to arrest people for not paying. The IRS also cannot revoke a license or immigration status. Threats like these are common tactics scam artists use to trick victims into believing their schemes.
The fact sheet notes that, in some cases (such as due to an investigation or audit), an employee may make an official and unannounced visit to the taxpayer or the taxpayer’s place of business. The IRS provided the following information to help taxpayers assure that such visitors are truly acting for the IRS:
- All IRS representatives will always provide their official credentials, called a pocket commission and a HSPD-12 card. The HSPD-12 card is a government-wide standard form of reliable identification for federal employees and contractors. Taxpayers have the right to see these credentials. IRS employees can provide an additional method to verify their identification. Upon request, they’re able to provide a toll-free employee verification telephone number.
- Collection employees won’t demand immediate payment to a source other than “U.S. Treasury.”
- IRS employees may call taxpayers to set up appointments or discuss audits but not without first attempting to notify taxpayers by mail.
- IRS employees conducting criminal investigations are federal law enforcement agents and will never demand money.
Another way taxpayers can legitimately be contacted related to an IRS debt is when the IRS refers an account to a collection agency. The IRS notes the following about legitimate private collection agency referrals from the agency:
- The IRS will send a letter to the taxpayer letting them know the IRS has turned their case over to one of the four PCAs. The PCA will also send the taxpayer a letter confirming assignment of the taxpayer’s account to the agency.
- The IRS will assign a taxpayer’s account to only one of these agencies, never to all four. The IRS authorizes no other private groups to represent the IRS.
- It’s important to know that PCA representatives:
- Will identify themselves and will ask for payment to “U.S. Treasury,”
- Will not ask for payment on a prepaid debit or gift card, and
- Will not take enforcement action.
Unfortunately, that list will likely overwhelm clients if you send the information out in a general mailing—and, in fact, that long list might make them more likely to believe a fraudulent call as they recall there were “lots of potential contacts” in that list. But the fact sheet can be very useful to direct a client towards when they are faced with a specific fraudulent call—then the taxpayer can be directed to the one or two lines that tell them the IRS would not do what the caller did.