One of the scariest things is being told you have a tax debt and being threatened with the police showing up to arrest you or other threatening action where you must pay the debt in full or face severe consequences. More often than not, we at Golden Lion Tax Solutions have had to deal with scammers attempting to force our clients to either pay a ridiculous amount of money, or “confirm” their personal information in order to steal their identity. Unfortunately, having a tax debt also comes with a tax lien filed with the local County Clerk and Recorder’s office, which means they are public record. This leaves taxpayers with tax debt more exposed to tax scams, but they are not the only ones targeted. In the past, our clients have experienced receiving fake notices from the IRS or State, threatening phone calls or even receiving emails. Now, some of these can come off as pretty legit, but they are not! It just means those scammers are more experienced and have done more research. This makes it really hard for taxpayers to decipher what is real and what is a scam. And not all taxpayers have access to a tax resolution representative to help determine if they are being scammed or not. So, let us help you by providing information to help you prevent becoming a scam victim.
What are the ways the IRS or State will reach out to you to let you know you have a tax debt that needs to be paid? Below are the more common steps the IRS and the States will take when notifying a taxpayer of a tax debt:
- Mail a notice that will clearly be from the IRS or the State. Usually, the State will come from the “Department of Revenue” or “Department of Taxation”.
- Continue to mail notices that become more demanding for you to pay the debt in full or work out a payment plan.
- Call taxpayers only if their account is assigned to an IRS or State Agent. These Agents will clearly state who they are and who they work for. They will also provide you with all their contact information and ID number. They will NOT threaten to arrest you or to send the police if you do not pay in full. That is just not how they work as there are still taxpayer rights that must be protected and procedures to follow.
There are very few States that may issue an arrest warrant, but in that case, the taxpayer has been identified as committing tax fraud or committed tax crimes that would be considered felonies. Florida is one State that can issue an arrest warrant, but only if the taxpayer has committed a felony tax crime. And believe me, you will know well before the warrant is issued if you are in trouble with the State.
So, what are the scams that exist that a taxpayer should keep an eye out for and report immediately?
The list is unfortunately quite lengthy and as technology grows, so do scams. Check out the list below so you won’t fall victim to one of these tax scams:
- Threatening Phone Calls from an Impersonator – The MOST common scam occurs via phone. These individuals will come off as very threatening by saying you will be arrested, deported or have your license revoked. NEVER engage with these individuals and hang up immediately!
- Email phishing – Emails sent disguised as the IRS, State, credit card company, lender, or banking institution to obtain personal information in order for the scammer to commit identity theft. The IRS and States DO NOT send emails to taxpayers, so if you receive an email from them, delete immediately. If it is from a credit card company, lender, or banking institute, when in doubt, give them a call to a phone number you are already familiar with and ask them about the email. This also helps them become aware of a scam impersonating them.
- Text message – The IRS and States DO NOT send text messages. PERIOD.
- Social Media scams – One of the newer scams, where someone impersonates a family or friend in hopes of gaining your personal information to file a fraudulent tax return to receive a fraudulent tax refund. NEVER give out personal information.
- Senior Citizen fraud – When scammers target our older Americans, it really boils the blood of the IRS, FBI, Department of Justice, among others. It is crucial to educate your elderly family members on all the scams listed in this blog so they too can recognize when they are being targeted and not falling victim. Number one thing for our elderly Americans is, do not EVER give out personal information to anyone, even if it is a legitimate source. Always have them confirm legitimacy before disclosing information.
- Payroll scams – Phishing occurs to obtain Form W-2 and other tax information to change a direct deposit account or make gift card requests. These scams are called Business Email Compromise (BEC) or Business Email Spoofing (BES). These occur when business emails are compromised. The BEC and BES must be reported to Internet Crime Complaint Center https://www.ic3.gov/. If a Form W-2 scam has occurred, they must report the scam via email to firstname.lastname@example.org and include in the subject line “W-2 Scam”.
- Ransomware – Targeted to hold data for ransom or “spy” on an individual or business to obtain a ransom in exchange for the return of data or gain access to personal information of an individual or employees of a business.
- Unethical tax return preparers – Unfortunately there are unscrupulous individuals in every industry, and tax return preparation is not immune. If you have a tax return preparer who is suggesting claiming credits you don’t actually qualify for, or fudge total amounts claimed to get a larger refund, this could open you to a tax audit, which can be scary, especially if it is determined you, or in this case your tax return preparer, lied on the tax return. This will result in a tax debt and penalties assessed against you as a corrected tax return will be completed. Another thing to keep watch for is to never sign a blank tax return or mail a return if there is no information included in the tax return preparer section below the taxpayer signature section. These are all signs that the tax return preparer is not ethical, and you should seek out a more reliable preparer to complete your tax returns.
Always keep your personal information protected and always pay attention to any red flags that pop up. This rule will keep you, and your family and friends protected. So please share this information with anyone you feel could help protect from falling victim to a tax scam. For more information, follow this IRS link https://www.irs.gov/privacy-disclosure/report-phishing. As for the State, you can conduct an internet search of the Department of Revenue or Department of Taxation website as each provide their own information on scam prevention and reporting.
Trust. Protection. Wisdom.
Your future and your family deserve the right protection. Golden Lion Tax Solutions will be your advisor and confidant throughout the entire journey. We guarantee to offer you or your business best-case solutions for your tax debt. We are by your side every step of the way. Start now and get your life back.
For help with your tax debts, email email@example.com or call 833-LION-TAX (833-546-6829)
Disclaimer: There are requirements that must be satisfied in order to qualify for some of the tax solutions we discuss on our website. Not all of our services will be suitable for every client. Golden Lion Tax Solutions is here to help you find the most appropriate solution to fit your situation.