Through the years, we have all been exposed to a plethora of money scams. From Nigerian princes requesting $5,000 be wired to save grandma to phone calls purportedly from Internal Revenue Service (IRS) stating that you will be going to jail, the length that a scammer will go to instill fear into the hearts of millions knows no bounds. This means you should not run to your bank and wire out the $5,000—Grandma is fine and not vacationing in Nigeria.
You can imagine that we, as tax law practitioners, get quite a few panicked phone calls every year related to the latest IRS scam. Previously, the main avenues for scammers who used the IRS as their Trojan horse was via a phone call or voice mail left for unsuspecting individuals stating that they owed a significant amount of taxes and that they should call immediately to avoid jail time. This especially hit the senior citizen community as they started to panic over their monthly Social Security checks. It used to be that we could easily answer the panicked calls we would receive by telling people that the IRS will never call you over the phone to tell you that you are going to jail. And that was that. However, scammers are like cockroaches, and even though you block one avenue for them, they will try a different route.
As IRS scams and consumer alerts have multiplied and evolved, the IRS has created a web page solely for the purpose of helping taxpayers recognize the latest and greatest attempts. The IRS confirms on this web page that the IRS does not initiate contact with taxpayers by email, text, or social media messages to request personal or financial information.
The top-three IRS scams that we currently see are related to (1) employee retention tax credit (ERTC) filings, (2) identity theft and fraudulent filing of tax returns for refunds, and (3) unclaimed refunds.