Businesses and individuals are protective of their financial resources so they often engage with the Internal Revenue Service to make sure that they follow proper procedures and meet requirements. Unfortunately, scam artists are taking advantage of this. Scammers have long used phony charities, credit card scams and phishing schemes to line their ill-gotten pockets; now the IRS is also warning taxpayers about an increase in the number of schemes in which fraudsters pose as IRS agents to gain access to a business’ or a taxpayer’s financial information.

Phony “Unclaimed Refund” Mailings

One of the newest schemes tries to mislead victims into believing they are owed a tax refund and must provide additional personal and banking information to claim it. The scheme begins with a mailing that arrives in a cardboard envelope from a delivery service. The enclosed letter appears to be on IRS letterhead with verbiage stating that the notice is “in relation to your unclaimed refund.”

To claim their alleged refunds, recipients are instructed to phone or email a variety of sensitive personal information—such as bank routing information, a Social Security number, and pictures of the taxpayer’s driver’s license—which the identity thieves then use to gain access to victims’ accounts.

The good news about this scam is that it can be relatively easy to spot as long as the targeted victims are alert to several red flags. First, they should understand that the IRS generally uses regular mail—never a delivery service—to notify taxpayers of unclaimed refunds. In addition, the phony letter may contain odd punctuation and awkward wording, such as “please try to be checking your email for response from the agents.” It may include an unusual mixture of typefaces as well.

Telephone Imposters

Another malicious scheme involves scammers who impersonate IRS agents over the phone. Unlike the unclaimed refund swindlers, these imposters claim the victim owes money to the IRS and insist that the payment must be made at once.

In many instances, these callers are aggressive and even hostile, threatening the target with arrest if he or she does not provide the requested bank information. In other cases, victims are told they must pay through a gift card or wire transfer. Criminals often target recent immigrants, who are also threatened with deportation if they do not comply.

Here again, the red flags are obvious, but only if taxpayers are alert to them. The IRS points out that it never uses the phone to provide first notice of an outstanding tax bill—it generally sends a bill first using regular mail. IRS agents will never demand immediate payment using a wire transfer, prepaid debit card, gift card, or other unconventional method, nor will they threaten to bring in police to arrest a delinquent taxpayer.

Text and Email Imposters

It probably comes as no surprise that scammers also use email and text messages to impersonate the IRS. The agency has issued numerous alerts about the fraudulent use of the IRS name or logo by impostors trying to trick taxpayers into thinking these are official communications.

These are usually phishing schemes designed to get taxpayers to reveal sensitive personal or financial information. These emails pretend to seek information related to refunds or filing status, or claim to be confirming personal information, ordering transcripts, or verifying PIN information. They often contain directions such as “you are to update your IRS e-file immediately,” and include links to bogus websites that are intended to mirror the official IRS website.

Some taxpayers have also received emails claiming to be from the Taxpayer Advocacy Panel (TAP) about a tax refund. These too are phishing scams—the TAP is a volunteer board that advises the IRS on systemic issues. It has no access to taxpayers’ personal information and never requests it. Naturally, there are text message variations on all these email schemes. In addition to phishing for personal and financial information, some of these messages may carry malware that can infect computers and allow criminals to access files or track keystrokes. It’s important to avoid clicking any link in a suspicious text or email, and to remember that the IRS will never initiate contact with a taxpayer by email, text, or social media. Unsolicited emails or texts claiming to be from the IRS should be forwarded to the IRS at phishing@irs.gov.

In-Person Imposters

Although it is relatively rare—and brazen—scammers posing as IRS agents do sometimes make an in-person visit to a taxpayer’s home or business. To combat this, the IRS announced last year that it is ending most unannounced visits to taxpayers by revenue officers. Instead, revenue officers will contact taxpayers through an appointment letter, known as a 725-B letter, and schedule a follow-up meeting.

The only general exceptions to this policy are regular fuel tax compliance inspections at certain regulated businesses or cases that involve the service of subpoenas or seizure of assets. In all cases, IRS agents will always present two forms of official identification: their IRS-issued credentials and a standard government HSPD-12 card.

Businesses and individuals should stay alert and vigilant whenever deadline with their finances, including making sure that any contact with the IRS is legitimate. Additional information from the iRS about fraud and schemes is available at https://www.irs.gov/privacy-disclosure/report-phishing and https://www.irs.gov/newsroom/how-to-know-if-its-really-the-irs.

If you are unsure whether a recent interaction with the Internal Revenue Service is valid, let us know. We can help you determine how, or if, you might respond.