Is it Really the IRS Knocking?

With continuing phone, e-mail and in-person scams rampant, in this segment of our Tax Update, we will help you understand how and when the IRS contacts taxpayers, and how to determine whether a contact is truly from an IRS employee. 

While the IRS initiates most contacts through regular mail delivered by the U.S. Postal Service, IRS employees do in fact make official, sometimes unannounced, visits to taxpayers as part of their routine casework. Visits typically fall into three categories:

  • Collection. In special circumstances-such as when a taxpayer has an overdue tax bill or to secure a delinquent tax return or a delinquent employment tax payment-IRS revenue officers will sometimes make unannounced visits to a taxpayer's home or place of business to discuss taxes owed or tax returns due. They will not demand that a taxpayer make an immediate payment to a source other than the U.S. Treasury.
  • Audits. IRS revenue agents will sometimes visit a taxpayer who is being audited. IRS employees conducting audits may call taxpayers to set up appointments, but not without first sending notification by mail. After mailing an initial appointment letter, an auditor may call to confirm and discuss items pertaining to the scheduled audit.
  • Criminal investigation. IRS criminal investigators may visit a taxpayer's home or place of business unannounced while conducting an investigation. However, these are federal law enforcement agents, and they will not demand any sort of payment. Criminal investigators also carry law enforcement credentials, including a badge.

Verification 

Taxpayers should keep in mind the reasons these visits occur and understand how to verify if it is IRS knocking at their door. If an IRS representative visits a taxpayer, he or she will always provide two forms of official credentials called a pocket commission and a HSPD-12 card. The HSPD-12 is a government-wide standard for secure and reliable forms of identification for Federal employees and contractors. Taxpayers have the right to see these credentials.

A legitimate IRS representative will not:

  . . . Demand that the taxpayer use a specific payment method, such as a prepaid debit card, gift card or wire transfer or ask a taxpayer for a debit or credit card number over the phone.

  . . . Demand that the taxpayer pay taxes without the opportunity to question or appeal the amount they say the taxpayer owes. Generally, the IRS will first mail the taxpayer a bill if he or she owes any taxes. The taxpayer should also be advised of his or her rights as a taxpayer.

  . . . Threaten to bring in local police, immigration officers, or other law-enforcement to have the taxpayer arrested for not paying. The IRS also cannot revoke a taxpayer's driver's license, business licenses, or immigration status. Threats like these are common tactics that scam artists use to trick victims into buying into their schemes.

Private debt collectors. The notes that it can assign certain cases to private debt collectors but only after giving the taxpayer and his or her representative, if one is appointed, written notice. Private collection agencies will not ask a taxpayer for payment on a prepaid debit card or gift card. Taxpayers can learn more about the IRS payment options on https://www.irs.gov/payments. Payment by check should be payable to the U.S. Treasury and sent directly to IRS, not the private collection agency. 

If you are ever contacted by someone claiming to be an IRS employee but are suspicious, contact a CPA who is experienced in Tax Controversy matters.  Scam artists are one rare type of visitor which can be worse than a visit by the IRS!

BGBC Partners, LLP is a full service certified public accounting and business consulting practice.