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ASK THE EDD LAWYER – IRS ISSUES WARNING ON NEW PHONE SCAM INVOLVING BOGUS CERTIFIED LETTERS

By Robert S. Schriebman

2017

Introduction

On June 16, 2017 the IRS issued Publication IR-2017-107 warning of a new phone scam involving the Electronic Federal Tax Payment System (EFTPS). Even though the IRS recently announced an international sweep and arrest of a major phone scamming operation, its sweep did not net all the bad guys. Be assured that crooks, especially those operating offshore, are developing new scams. As these scams become known I will keep you informed.

The IRS has issued a new warning regarding taxpayers using the EFTPS electronic deposit system. The crooks are calling business people and demanding an immediate tax payment through the use of a pre-paid debit card. This scam is countrywide.

EFTPS is an automated system whereby you pay your taxes electronically either through your computer or phone. EFTPS is offered free by the Treasury Department and no taxpayer is required to purchase a pre-paid debit card. Because EFTPS is an automated system, the IRS does not call taxpayers.

The Latest EFTPS Scam

In this latest scam the taxpayer gets a call from someone claiming to be from the IRS. These callers have gotten very sophisticated. They use employee ID numbers, which are phony but the average person doesn't even know anything about IRS employee ID numbers. They use Washington, D.C., Virginia and Maryland telephone prefixes and even have phony background noise. It all sounds very authentic, and a bad trap for the unwary.

The scammer tells the victim about two certified IRS letters purportedly sent to the taxpayer but returned to the IRS as undeliverable. The victim is then threatened with arrest if payment is not paid through a pre-paid debit card. The scammers also tell their target that the debit card is linked to the EFTPS. The poor taxpayer - victim is then warned not to contact any professional or the IRS until after the tax payment is made.

Since taxpayers use the EFTPS year round, the scam is not just confined to "tax season" or "tax refunds."

The IRS Press Release also set forth tell-tell signs of a phone scam and made suggestions on how a potential victim can protect himself or herself. Let's see what the IRS has to say.

How to Tell A Tax Scam

The first thing you should be aware of is to always be suspicious about getting any call from the IRS. IRS revenue officers will call taxpayers who owe money, but this will not happen unless and until a taxpayer receives a series of collection letters from the IRS, and has ignored them.

If you do not believe you owe taxes, then it is pretty much a sure bet that the call is phony. Use your computer - go to IRS.gov to see if you owe the IRS and the exact amount you owe. The IRS also has payment options available to you.

The IRS will never demand payment by the use of a credit card or a pre-paid debit card. The IRS will never demand payment by wire transfer. The IRS will never ask for this type of information over the phone.

All payments made to the IRS should be payable to "US Treasury" and never to a specific individual.

The IRS will never threaten to call the police, sheriff, or any other law enforcement agency because you owe taxes.

How to Protect Yourself

The most effective thing to do to protect yourself is to say nothing and hang up the phone. If the caller calls back, hang up again.

Call a reputable tax professional to determine if the call is genuine. You are always welcomed to call this office for help.

Call the IRS Help Line at 1-800-829-1040.

Contact the Treasury Inspector General for Tax Administration to report the call. 1-800-366-4484

Conclusion

The IRS does not make cold calls to the public asking for money. They will never send you a text message or use social media. The best protection against these crooks is to go with your gut and assume the call is phony. Hang up and continue to hang up until the calls stop. The members of the California Tax Bar as well as their counterparts in the accounting profession are here to help you protect yourself against these criminals. Pick up the phone and make the call.

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Robert Schriebman has a successful practice in the Rolling Hills Estates area of Los Angeles County serving clients throughout California and the United States. He has successfully dedicated more than 40 years to helping individual taxpayers, business owners, CPAs, Enrolled Agents, and tax attorneys navigate the complicated tax systems of the federal and state governments.

Robert Schriebman has written the only 2 books ever published dealing with how California Employment Development Department (EDD) operates. See "California Tax Collection Practice and Procedures" and "California Taxation Practice and Procedure," both published by Commerce Clearing House.

Robert Schriebman has written over 20 books including the major manual used nationally by practitioners and the IRS, "IRS Tax Collection Procedures - A Manual for Practitioners" published by Commerce Clearing House.

Robert Schriebman has written over 20 books including the major manual used nationally by practitioners and the IRS, "IRS Tax Collection Procedures - A Manual for Practitioners" published by Commerce Clearing House in addition to the only 2 books ever published dealing with how California Employment Development Department (EDD) operates. See "California Tax Collection Practice and Procedures" and "California Taxation Practice and Procedure," both published by Commerce Clearing House.

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