IRS Impersonators and Erroneous Notices
Criminals have been stealing the IRS logo to persuade people into divulging financial information. As a taxpayer, you can avoid becoming a victim of these schemes by recognizing a simple rule.
“The IRS never communicates by email,” says Andy Biebl, a tax principal with LarsonAllen. “If the communication purports to be the IRS asking for information, it’s a sham.”
Many times, people receive emails that look like they came from the IRS about rejected tax payments, balances, penalties, and changes to their account.
IRS agents won’t call taxpayers asking for personal information and they do not use email. In general, they communicate by mail.
Recent email and phone tricks
In August 2010, the IRS announced a cyber crime involving the Electronic Federal Tax Payment System (EFTPS). This “phishing” scam tells recipients their tax payments were rejected and attempts to lead them to a fake website seeking personal information. The website can infect your computer with malicious software (malware). View a sample of a suspicious phishing email that’s been around since 2006.
If you get an email from the IRS, never reply to the sender, click on links in the message, or open any attachments.
There have also been many reports of taxpayers getting calls from so-called agents who needed confidential information to process refunds. Do not fall for this either.
How to respond to legitimate mailings from the IRS
Notices from the IRS are usually about a specific topic, such as possible omitted income based on Form 1099 reports from third parties. They include instructions on how to respond, and generally contain an assessment of additional tax. Because these notices appear as official tax assessments, people often don’t question them.
“When you receive a letter that includes a worksheet with a correction to your tax return, don’t assume your CPA made a mistake and just deal with the situation yourself,” advises Biebl. “Let your CPA see the notice.”
The great majority of these written notices are generated by IRS computers, which automatically match the third party information returns (Form 1099s) to the Individual Income Tax Returns (Form 1040s). If there’s not a quick match of the information return to your 1040, the system blindly assesses tax. The income might well be reported at a different location in your return, but the IRS computers don’t recognize that fact. These “matching” notices are untouched by human eyes that might identify the IRS error.
“Our experience is that most of the letters end up being incorrect,” says Biebl. Taxpayers should get these notices to their tax professional for a detailed review. Most can be cleared with a written response to the IRS explaining the 1099 matching problem.”
According to Biebl, there’s another simple rule: “Any notice from the IRS or your state’s department of revenue goes to your CPA.”
Helpful links
View our tax principals.