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ASK THE CALIFORNIA EMPLOYMENT AND PAYROLL TAX ATTORNEY – HOW DOES THE IRS CONTACT TAXPAYERS?

By Robert S. Schriebman

2018

Introduction

The IRS has recently issued a series of blunt and alarming warnings to tax representatives and return preparers on the increasing volume of scams and electronic invasions of client data. So much so, that in the next several weeks the IRS will be issuing a new series of warnings and protections known as the Tax Security 101 Campaign. In addition to this campaign the IRS has issued Tax Tip 2018-111 informing the public what they should know how the IRS contacts taxpayers.

This article will give you an overview of how to determine if the IRS contact is legit. Of course, if an IRS collector or auditor is visiting you face-to-face, he or she will present official identification that will contain, among other things, the official employee ID number.

How Does the IRS Communicate with Taxpayers?

When you deal with a California agency, such as the EDD, you can expect to receive an email with official reference to the auditor’s name, followed by "edd.ca.gov." The first thing you should know is that the IRS does not usually use email. Sometimes auditors will communicate with a representative by email, but only after a face-to-face audit conference. However, this doesn’t happen often. If your initial contact from a supposed IRS person is by email, you can bet a scammer is trying to separate you from your money.

Not only does the IRS not use email, but it does not send text messages or contact taxpayers via social media.

The usual initial contact made by the IRS is a letter delivered by the post office. The IRS Tax Tip warns that scammers often use fake documents through the mail and they will sometimes claim that they already notified you by mail but you failed to respond. Now, you must be very careful when receiving a letter from either the IRS or a scammer. Let me tell you that some of the scammer letterheads and symbols are so close to official IRS emblems that I too have been fooled. I have reported these people to the IRS and sent the IRS the original documentation I received. If your gut tells you to be suspicious, go on the official IRS website and compare the emblems and symbols to those on your correspondence.

Sometimes the IRS will show up at your door unannounced. These are usually IRS collectors known as Revenue Officers. They will have proper official identification. These no-warning visits are usually made when the IRS suspects severe employment and withholding tax violations, such as repeated failure to make federal tax deposits. Tax auditors, known as Revenue Agents, usually work through the mail and do not show up on your doorstep.

These days the IRS has retained private debt collection agencies. These debt collectors must follow the rules for contacting taxpayers under state law. These private collectors are authorized to contact tax debtors by telephone. But only after the taxpayer or their representative have received prior written notice. Most state laws prohibit contacting taxpayers at night or at other times set forth by state law.

You should also be aware of the demands made by scammers for the payment of taxes as opposed to official IRS demands. The IRS will only demand that payments be made through a proper electronic payment system or by paper check payable only to the U.S. Treasury. If the caller demands payment in any other method, you are being scammed. The IRS does not demand payment by debit or credit cards.

Whenever you are personally contacted by anyone claiming to be from the IRS, you must protect yourself by demanding to see official credentials. There are two types of official credentials: a pocket commission or a Personal Identity Verification Credential. Not everyone takes the time to demand to see official credentials. This failure can lead to disaster. Recently a man walked into a local supermarket in my community and demanded a copy of employee payroll records and employee identification in disk format. Without asking for identification, the disk was turned over to the stranger who was never seen again. The entire supermarket employee data system was compromised.

Conclusion

The IRS is warning the public as well as the professional community that tax scams are on the rise despite all the federal government’s efforts, working with the private sector, to protect taxpayer data. They can’t keep up with the volume of fraud. Fraud protection starts with you. Don’t depend upon the government to keep you safe.

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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. Mr. Schriebman is in private practice. He is not affiliated in any way with the EDD and he is not employed by the EDD or any other agency of the State of California.

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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