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July 2016 Tip of the Month

We Told the Judge Who Asked Us and Now We're Telling You

....and we thank the Judge who has called Abo and Company curious about the phone message he got ostensibly from the IRS. It's got nothing to do with your age, your profession, your financial prowess. Tax scammers work year-round; they don't take the summer off. We urge you to stay vigilant against calls from scammers impersonating the IRS.

Anyway, the judge's inquiry reminded us to pass along some tips to help you avoid being a victim:

  • Scams use scare tactics. These aggressive and sophisticated scammers try to scare people into making an immediate payment. They make threats, often threaten arrest or deportation, or they say they'll take away your driver's or professional license if you don't pay. They may also leave "urgent" callback requests, sometimes through "robo-calls". Emails will often contain a fake IRS document with a phone number or an email address for you to reply.
  • Scams spoof caller ID. Scammers often alter caller ID to make it look like the IRS or another agency is calling. The callers use IRS titles and fake badge numbers to appear legit. They may use online resources to get your name, address and other details about your life to make the call sound official.
  • Scams use phishing email and regular mail. Scammers copy official IRS letterhead to use in email or regular mail they send to victims. In another new variation, schemers provide an actual IRS address where they tell the victim to mail a receipt for the payment they make. This makes the scheme look official.

The real IRS will not:

  • Call you about your tax bill without first sending you a bill in the mail.
  • Demand that you pay taxes and not allow you to question or appeal the amount that you owe.
  • Require that you pay your taxes a certain way. For instance, require that you pay with a prepaid debit card or any specific type of tender.
  • Ask for credit or debit card numbers over the phone.
  • Threaten to bring in police or other agencies to arrest you for not paying.
  • Threaten you with a lawsuit.

If you don't owe taxes or have no reason to think that you do:

  • Do not provide any information to the caller. Hang up immediately.
  • Contact the Treasury Inspector General for Tax Administration. Use TIGTA's "IRS Impersonation Scam Reporting" web page to report the incident.
  • You should also report it to the Federal Trade Commission. Use the "FTC Complaint Assistant" on FTC.gov. Please add "IRS Telephone Scam" in the notes.

If you know you owe, or think you may owe taxes call the IRS at 800-829-1040. We've found IRS employees can help you if you do owe taxes.

But what about the letter or notice you might receive from the IRS?

The IRS normally sends correspondence in the mail. They mail millions of letters to taxpayers every year. Keep these important points in mind if you get a letter or notice and you do not feel it necessary to have Abo and Company handle it for you (after all, we do sell our time and expertise):

  • Don't Ignore It.  Most IRS notices can be responded to quickly and easily. 
  • Follow Instructions.  Read the notice carefully. It will tell you if you need to take any action. Be sure to follow the instructions. The letter will also have contact information if you have questions.
  • Focus on the Issue.  IRS notices usually deal with a specific issue about your tax return or tax account. The notice or letter will explain the reason for the contact and give you instructions on how to handle the issue. 
  • Correction Notice. If the IRS corrected your tax return, you should review the information provided and compare it to your tax return.

If you agree, you don't need to reply unless a payment is due.

If you don't agree, it's important that you respond. Follow the instructions on the notice for the best way to respond. You may be able to call IRS to resolve the issue. Have a copy of your tax return and the notice with you when you call. If you choose to write to the IRS, be sure to include information and any documents you want them to consider (and send us a copy for our files). Also, write your taxpayer identification number (Social Security number, employer identification number or individual taxpayer identification number) on each page of the letter you send. Mail your reply to the address shown on the notice. Allow at least 30 days for a response.

  • Respond to Requests about the Premium Tax Credit.  The IRS may send you a letter asking you to clarify or verify your premium tax credit information. You should follow the instructions on the letter.
  • You Don't Need to Visit the IRS.  You can handle most notices without visiting the IRS. If you have questions, call the phone number in the upper right corner of the notice. Have a copy of your tax return and the notice when you call.
  • Keep the Notice.  Keep a copy of the IRS notice with your tax records as well as your response and, of course, forward copies to your accountant (that be us).

Watch Out for Scams.  As we started this alert, don't fall for phone and phishing email scams that use the IRS as a lure. They will contact you about unpaid taxes by mail first - not by phone.  Be aware that the IRS does not initiate contact with taxpayers by email, text or social media.