How Do Tax Debt Scam Calls Happen
Its scary to have federal tax debts, and scammers found a way to exploit this through tax debt scam calls.
Heres how the IRS scam phone calls work:
- Fake companies and law firms call you and pretend to be accredited by the IRS.
- They may also impersonate IRS agents and claim that they know about your debt.
- For verification, scammers will request personal information, such as Social Security Number or bank account details.
- They may also ask for confidential documents, claiming that the IRS needs those. But in reality, they wish to commit identity theft and other fraud.
- They deceive you into paying a high upfront fee to drastically reduce your tax debt.
- The fraudsters may also claim to eliminate your interests and penalties.
However, the scammers will never forward your documents to the IRS. After collecting the fees, theyll say that you no longer qualify for the tax debt relief program or that the IRS rejects your request.
In the end, the fraudsters will refuse to refund your advance fee, saying that its non-refundable and they cant do anything with your request.
But we found out that the IRS will only call you if you owe a significant amount of tax debt, or theyll conduct a field audit.
So how does the IRS contact you if there is a problem? Heres the actual collection process of the agency:
Scammers require you to pay a high upfront fee, while the IRS only asks for a small amount when you apply for the installment basis.
Important:
Heres When The 2023 Tax Season Starts And Why Your Refund Might Be Smaller
Its 2023 which means its time to box up the Christmas tree, put away the New Years Eve party decor, and start gathering your tax documents as the tax filing season is upon us. But, when exactly does tax season start in 2023? Last year, the IRS began accepting tax returns on Jan. 24.
Although the agency hasnt yet announced when it will begin processing tax returns in 2023, we suspect it will be toward the end of January. Despite this, you can still get a head start on filing your taxes, though you may want to wait before you actually submit your return. Heres a look at the first day you can file your taxes in 2023 and why the IRS warns of smaller refunds this year.
How Do I Get My Irs Debt Forgiven
Apply With the New Form 656 An offer in compromise allows you to settle your tax debt for less than the full amount you owe. It may be a legitimate option if you can’t pay your full tax liability or doing so creates a financial hardship. We consider your unique set of facts and circumstances: Ability to pay.
Also Check: What Is Your Tax Id Number
When Can We Start Filing Taxes In 2023
The first day you can file your taxes is Jan. 3, 2023. However, this isn’t the first day the IRS will begin accepting tax returns. Although you may be eager to get your taxes done early, youll need to wait until the IRS starts accepting returns before it can actually be processed.
It’s also recommended that you wait to file your taxes until youve received all your tax documents including W-2s, 1099s, and any other forms that document any income you earned in 2022. Employers have until Jan. 31, 2023, to send out W-2s, which means you may receive it a few days after if it’s sent out at the last minute.
If you plan on using a software preparation company to file your taxes, you can start inputting basic information on your forms so that youll have less to fill in once you receive all your tax documents.
How To Get The Quickest Return
Filing your return as soon as possible helps you get any refund you are eligible for faster. That said, there is more you can do to help your cause.
The fastest way to get your tax refund is to eFile and choose to receive your payment via direct deposit. You do have the option to split your deposit into up to three separate accounts.
After you file, you can use the Wheres My Refund tool to track progress.
You May Like: Can You File Taxes For Unemployment
Claim Your Renewable Energy Credits
You might not be able to deduct your mortgage interest payments in any meaningful way, but you can still claim renewable energy credits. You should file Form 5695 if you have qualified costs for residential energy across any of these areas:
Youll also use this form to deduct any energy-efficient home improvements youve made to your property.
These nonrefundable credits can help lower your tax bill to $0, but they wont put any money back in your pocket.
The Refund Recalculation Scam
We all want the maximum refund when we file our income taxes. Criminals know this and arent afraid to take advantage.
In the refund recalculation scam, criminals will contact you, either by email or text, to say that they recalculated your IRS refund and that you are due more money than originally thought.
That sounds like good news. Unfortunately, its a scam.
The emails, which might include the official IRS logo, will ask you to click on a link. When you do, youll be taken to a web page that asks for such information as your Social Security number, birthdate, drivers license number, and other information. If you provide this information, the scammers will use it to access your online bank and credit card accounts or apply for credit cards and loans in your name.
How to avoid this scam: Again, the easiest way to avoid this scam is to understand how the IRS works. If the IRS did make a refund mistake, it would contact you through regular mail first, not through email. The IRS will also never ask for your personal or financial information through email. Spot any of these telltale signs? Delete that email. And never click on any links in it. If you are concerned that you might actually have a larger refund coming, contact the IRS directly through its customer service numbers to check.
Recommended Reading: How Does Property Tax Work
Scams Targeting Tax Professionals
Increasingly, tax professionals are being targeted by identity thieves. These criminals many of them sophisticated, organized syndicates – are redoubling their efforts to gather personal data to file fraudulent federal and state income tax returns. The Security Summit has a campaign aimed at tax professionals: Protect Your Clients Protect Yourself.
Schemes
Phishing is a scam where fraudsters send e-mail messages to trick unsuspecting victims into revealing personal and financial information that can be used to steal the victims identity.
The IRS has issued several alerts about the fraudulent use of the IRS name or logo by scammers trying to gain access to consumers financial information to steal their identity and assets.
Scam emails are designed to trick taxpayers into thinking these are official communications from the IRS or others in the tax industry, including tax software companies. These phishing schemes may seek information related to refunds, filing status, confirming personal information, ordering transcripts and verifying PIN information.
Be alert to bogus emails that appear to come from your tax professional, requesting information for an IRS form. IRS doesnt require Life Insurance and Annuity updates from taxpayers or a tax professional.
The sites may ask for information used to file false tax returns or they may carry malware, which can infect computers and allow criminals to access your files or track your keystrokes to gain information.
First Day To File Your Taxes
Technically, the first day to file your taxes is January 3, 2023. However, if you do it that early, the IRS wont accept or process them. You also likely wont have all the forms you need to complete your tax return yet, including your W-2 or 1099s for interest payments.
The IRS is usually ready to accept tax returns the last week of January, with the official announcement arriving sometime in the middle of the month.
For example, in 2022 the IRS announced on January 10 that it would start accepting tax filings effective January 24.
Don’t Miss: Where Do You Mail Federal Tax Returns
What To Do If You Become A Target Of A Scam Artist
To confirm any claims made by potential scammer contact the IRS at 1-800-829-1040 or DOR Customer Service at 317-232-2240, Monday through Friday, 8 a.m.4:30 p.m. ET.
How To Tell If Youre The Target Of An Irs Scam
The IRS says impostors are increasingly turning to robocalls to broaden their reach, with automated messages requesting a call back to resolve a supposed tax problem. Scammers also deploy phishing emails, often targeting college students, faculty and staff members with addresses ending in the domain name .edu, the IRS and FTC warn. The emails, with IRS logos and subject lines like Tax Refund Payment, link to a website that asks for personal data such as Social Security and drivers license numbers to facilitate the refund.
Recommended Reading: What Is The Difference Between Payroll And Income Taxes
Fraudsters Posing As Taxpayer Advocacy Panel
Some taxpayers receive emails that appear to be from the Taxpayer Advocacy Panel about a tax refund. These emails are a phishing scam, trying to trick victims into providing personal and financial information. Do not respond or click any link. If you receive this scam, forward it to and note that it seems to be a scam phishing for your information.
TAP is a volunteer board that advises the IRS on systemic issues affecting taxpayers. It never requests, and does not have access to, any taxpayers personal and financial information.
Avoid Scams: Know The Facts On How The Irs Contacts Taxpayers
FS-2018-12, May 2018
Crooks impersonating the IRS either by phone, email or in person cost people their time and money. The IRS urges people to stay vigilant against schemes and scams and avoid becoming a victim.
Here are some important tips for taxpayers to keep in mind to avoid scams:
Read Also: Can You Be Married And File Taxes Separately
False Charities That Solicit Donations
If you lost a family member from a disease or another tragedy, con artists can close in. These scammers target taxpayers who might want to make a tax-free donation to a particular charity. If you get a phone call or email soliciting money to fight disease or assist victims, don’t give out cash or financial info. Instead, look up the charity on the Exempt Organizations Select Check tool to see if it’s legitimate.
How Tax Transcript Scams Work
The scam works this way: you get an email with the words tax transcripts in the subject line. The email has an attachment named Tax Account Transcript or something similar. Dont open this attachment. Its malware known as Emotet that can infect your computer network and steal personal and business information.
The IRS will never call, email, or text you asking for your tax information. It will also not send you a message with an attachment asking you to log in to get a tax transcript or update your profile.
Recommended Reading: How Much Should I Put Aside For Taxes 1099
Irs: Expected Big Change For 2023 Tax Filing Pushed Back A Year
In this March 22, 2013, photo, the exterior of the Internal Revenue Service building is seen in Washington. The IRS is announcing plans to hire 10,000 new workers to help reduce a massive backlog that the Biden administration says will make this tax season the most challenging in history. AP
STATEN ISLAND, N.Y. — The Internal Revenue Service is delaying a major tax filing change that was scheduled to go into effect this year.
The agency previously announced its lowering of the reporting threshold for Form 1099-K forms used to report business payments and transactions from online platforms, card processors and apps, such as Etsy, Venmo, PayPal and Uber.
Under the American Rescue Plan Act of 2021, the threshold changed from more than 200 transactions for the year with an aggregate amount of $20,000 to $600 regardless of the number of transactions.
The drastic shift in the reporting requirement means that many people will be receiving 1099-K forms for the first time.
To mitigate confusion and potential filing errors under the new policy, the IRS opted to implement a transition year.
The IRS and Treasury heard a number of concerns regarding the timeline of implementation of these changes under the American Rescue Plan, Acting IRS Commissioner Doug ODonnell said.
The existing rule will remain in place through the end of 2023.
Filing a Form 1099-K may be a change for some people, but the way the money is taxed hasnt changed.
The Irs Phone Scam: Does The Irs Call You
With impersonations at a record high, you may have already encountered an IRS phone scam from an impersonator via phone, text, or other means. Each day, scammers use more and more advanced tactics to trick taxpayers into giving away personal information and money.
In fact, IRS phone scams is on the IRS Dirty Dozen list of the most common scams. As of February, 2017, over 10,000 victims have paid in excess of $54 Million to the scammers. Thats an average of $5,400 per individual.
Luckily, the IRS adheres to the following protocols and modes of communication which allows taxpayers to better identify an IRS representative from a fraudster.
Fact 1: The IRS Never Initiates Contact Via Phone
The IRS initiates most contacts through regular mail delivered by the United States Postal Service.
Fact 2: The IRS Will Not Ask Certain Things Over the Phone
The IRS behaves in predicted ways. In fact, the IRS will never call you and
- Ask for personal information, like your Social Security number, credit card or bank routing numbers, or other personal information.
- Inquire about taxes owed without first having mailed you a bill.
- Ask for an immediate tax payment over the phone. Typically, the IRS will first mail a bill to any taxpayer who owes taxes.
- Demand that you owe a certain amount of money in delinquent taxes, without the opportunity to appeal.
- Threaten to bring in local police or other law enforcement groups to have you arrested for not paying.
What Actions Can You Take?
Don’t Miss: When Will I Receive My Federal Tax Return
What To Do If You Get A Scam Call From The Irs
The IRS has an official tax help center you can call if you get a scam call.
- Take note of the number before hanging up.
- If you dont owe taxes to the IRS, report the incident to the Treasury Inspector General for Tax Administration by completing the IRS Impersonation Scam Reporting form. You may also call 800-366-4484.
- Send an email to and type IRS Phone Scam under the subject line.
- You may also report the fraud to the Federal Trade Commission and add IRS Telephone Scam to the comment box.
You can help these government agencies stop identity theft cases and tax debt scams by reporting the fraudulent call.
What Happens When You Owe The Irs Money And Can’t Pay
If you filed on time but didn’t pay all or some of the taxes you owe by the deadline, you could face interest on the unpaid amount and a failure-to-pay penalty. The failure-to-pay penalty is equal to one half of one percent per month or part of a month, up to a maximum of 25 percent, of the amount still owed.
Recommended Reading: How To Deduct Taxes From 1099
Prevent Tax Id Theft With An Identification Protection Id
Identification Protection PINs are six-digit numbers issued to taxpayers by the IRS to prevent tax ID theft. If youve experienced tax ID theft in the past, the IRS will automatically issue you an IP PIN. You can also voluntarily request one. After the IRS issues your IP PIN, you will use it to file your return. This will help the IRS confirm your identity so no one can file a return using your personal information to fraudulently collect a refund. Learn more about the IP PIN and how you can apply.
Will The Irs Call You
IRS employees can call taxpayers to schedule appointments or discuss audits, but not before trying to notify taxpayers by mail. IRS employees who conduct criminal investigations are agents of federal law and will never demand money.
IRS employees can call taxpayers to schedule appointments or discuss audits, but not before trying to notify taxpayers by mail. IRS employees who conduct criminal investigations are agents of federal law and will never demand money. However, there are circumstances in which the IRS will call or go to a home or business. These include when a taxpayer has an overdue tax bill, an overdue tax return, or hasn’t made an employment tax deposit.
An IRS employee can also view assets or visit a company as part of an ongoing collection investigation, audit, or criminal investigation. Tax officials carry two forms of official identification: IRS-issued credentials and an HSPD-12 card. You can request this six-digit number directly from the IRS as a way to make life difficult for identity thieves. The IRS, state tax agencies and the tax industry are warning tax professionals about a new fraudulent email that impersonates the IRS and attempts to steal electronic filing identification numbers .
References
Recommended Reading: How To Calculate My Tax Return
If You Are A Victim Of Tax
- Contact the IRS immediately at 800-908-4490. The IRS will advise you to file a report with your local law enforcement agency.
- Contact the Hanover County Sheriffs Office non-emergency line at 804-365-6140 to file a report.
- File a complaint with the Federal Trades Commission at identitytheft.gov.
- Contact one of the three major credit bureaus to place a fraud alert on your credit records:
