IRS Warns of New Tax Scams

Although telephone tax scams have been around for years, there are some new angles being implemented. One involves demanding payment of a tax that doesn’t even exist, while another directs taxpayers to pay tax liabilities using iTunes Gift Cards or other types of prepaid debit cards. In response to the rise of such threats, IRS Commissioner John Koskinen recently issued a statement warning taxpayers to “remain vigilant and not fall prey to … aggressive calls demanding immediate payment of a tax supposedly owed.”

Some of the telephone tax scams that have popped up fairly recently are highlighted below:

  • “Federal Student Tax” Scam

This scam, which targets students, involves phone calls demanding payment of a fake tax called the “Federal Student Tax.” Although the tax doesn’t even exist, the scammers sound believable because they usually have obtained some legitimate piece of information such as the name of the school the taxpayer attends. The caller typically demands that the tax be paid using some untraceable method such as a MoneyGram and threatens legal action if the money is not received.

  • iTunes Gift Card Tax Scam

This scam, which has cost targeted taxpayers over $1.4 million, involves a scammer impersonating an IRS employee demanding the payment of back taxes using an Apple iTunes Gift Card. Other similar scams insist that tax payments be made using any one of a variety of other types of prepaid cards such as Reloadit, MoneyPak or Green Dot.

  • IRS Impersonation Tax Scam

This scam consists of callers presenting themselves as IRS representatives threatening targeted taxpayers with arrest if they don’t pay outstanding tax balances though the use of a prepaid debit card. The scammers claim that certified letters have been previously sent and that the debit card purchase is somehow linked to the Electronic Federal Tax Payment System which, of course, it is not. Part of the scam includes a warning that the taxpayer should not contact the IRS or their tax preparer until after the tax is paid.

To avoid falling prey to these and other tax scams, taxpayers should be aware that the IRS never demands payment of taxes over the phone or asks for personal information for the purpose of verifying a person’s identity. They will also never ask for debit or credit card numbers or threaten arrest if taxes are not paid. The IRS urges anyone who receives such a call to just hang up and not call back. If a tax collection message comes in the form of an email, the recipient is warned not to click on any links or supply any personal information. Taxpayers beware! Although tax season is officially over, tax scammers are as active as ever!

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