March 18, 2019
By: Kim Kass J.D.
By: Kim Kass J.D.
One morning recently, I received a frantic call from my elderly mother. She was hard to understand because she was very upset and sobbing uncontrollably.
“They’re going to arrest your dad!” she wailed.
“What?? Who??” I replied.
“The IRS! They said we owe them money and they are going to arrest your dad!”
I did my best to calm my mother down and asked her for some more specifics. It turned out that a message had been left on their answering machine (yes, they still have a separate machine, not that new-fangled voicemail thing). She played the message for me, and it sounded like an auto-generated “robo call”. Indeed, the caller stated, “you have unpaid taxes” and “a warrant will be issued for your arrest unless you call us back and make payment immediately.”
No wonder mom was freaking out.
Unfortunately, over the last several years these types of calls have become very common. In 2015, the IRS reported that it had received over 730,000 reports of this type of call just since October 2013. Scammers like these have managed to steal over $23 million from unsuspecting victims. Despite so many reports, and having national and local news outlets report on these scams a number of times, the calls seem to be continuing unabated. They tend to prey on the elderly and new immigrants, especially those for whom English is a second language. However, anyone could be a target.
With tax season upon us, I expect that these types of calls may be ramping up. It could be a recorded message like my parents received, or it could be a live person calling. Often, the scammers use a Caller ID “masking” device to make the call appear as though it is coming from a local number to improve the chances the intended victim will answer the phone. In reality, they could be calling from anywhere, even from another country.
So, what should you do if you get a call like this? Hang up! Even if you think you may owe money to the IRS, their first contact with you will NEVER be by telephone. You will get always get a letter first, and it will include a detailed explanation of your right to appeal. In addition, the IRS will never:
■ Insist you pay by telephone.
■ Ask for credit or debit card information over the phone.
■ Threaten you with arrest or even court action; the IRS has its own administrative system for handling these types of matters. Local law enforcement and state courts are never involved.
What else can you do? You can report the call to the proper authorities. The Treasury Inspector General for Tax Administration (“TIGTA”) handles these matters for the IRS. TIGTA can be reached at 800-366-4484 or through its website.
In addition, you can report these types of calls, whether they claim to be from the IRS or some other random fake debt collector, to the Federal Trade Commission.
Remember, anytime someone threatens you over the phone and/or is asking for a credit or debit card number, you should assume it is a scam. Never give any banking or other personal information out over the phone. If you choose to engage them at all, ask for their full name and a call back number. If it is a real collector, they will provide this information and then you will have the opportunity to check into it before taking any action. For further information about this and other similar types of scams, including email scams, visit the IRS “Tax Scams and Consumer Alerts” website.
The opinions and other information in the commentary are as of March 11, 2019. This summary is intended to provide general information only, and is reflective of the opinions of Commerce Trust Company. Commerce does not provide tax advice or legal advice to customers. Consult a tax specialist regarding tax implications related to any product and specific financial situation. This material is not a recommendation of any particular security, is not based on any particular financial situation or need, and is not intended to replace the advice of a qualified attorney, tax advisor or investment professional. Diversification does not guarantee a profit or protect against all risk. Past performance is no guarantee of future results. Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.
Commerce Trust Company is a division of Commerce Bank.