BBB Warning: Beware of Fake IRS Scams

Big Island Now stock photo. August 2016.

Even as the tax season slowly comes to a close, tax day only a week away, Hawai‘i’s Better Business Bureau warns everyone to watch out for fake IRS calls.

Over the past few weeks, nationally, the BBB has seen an increase in reports of tax collection scams, the most common form being the fake IRS call, on the BBB Scam Tracker.

Nationally, the amount of fake tax collection reports jumped from 216 in February to 277 in March.

Locally Hawai‘i’s BBB has received 13 reports via the BBB Scam Tracker.

Scammers will normally call their potential victims, claiming to be IRS agents.

They may alter their caller ID to make it appear as if the IRS is the one calling and they will often time already have some personal on their target. The taxpayer will be told that they owe money and must pay immediately or face potential jail time.

A slight twist to the fake IRS call, which seems to be gaining popularity among scammers, involves the scammer using a pre-recorded voice. This pre-recorded voice tells the potential victim that the IRS is trying to contact them and then supplies a call-back number.

Some red flags that the call a taxpayer receives is a scam include:

• It is the first they have heard about the debt. Tax agencies don’t call, text, or email without first contacting you by mail. If a taxpayer never received a letter about past due taxes, the “agent” is most likely a scammer.
• The taxpayer is pressured to act immediately. Scammers typically try to push a victim into action before they have had time to think. The government will give a person the chance to ask questions or appeal what they owe.
• Payment must be made by wire transfer, prepaid debit card, or other non-
  traditional payment methods. These methods are largely untraceable and non-reversible. Tax agencies don’t demand immediate payment, require a specific form of payment, or ask for credit card or debit card numbers over the phone.

In 2015 the Fixing America’s Surface Transportation Act, or “FAST Act” was signed into law. Under this new law, the IRS became required to use private debt collection companies to collect “inactive tax receivables.” Inactive tax receivables are any debt:

•  That has been removed from the active inventory for lack of resources or inability to locate the taxpayer
• Which more than 1/3 of the applicable limitations period has lapsed and no IRS employee has been assigned to collect the receivable
• For which, a receivable has been assigned for collection, but more than 365 days have passed without interaction with the taxpayer or a third party for purposes of furthering the collection.

This third party collection agency program will begin later this spring. The IRS reminds taxpayers that they will receive written notice when their account is being transferred to a private collection agency, and the collection agency will then send a second, separate letter to the taxpayer confirming the transfer.

For more advice on how to handle IRS scams or other tax-related scams, consumers can visit the tax tip’s section of the BBB website.

If you owe taxes or you think you might, contact the IRS at (800) 829-1040 or irs.gov.

IRS employees can help you if there really is an issue.