Tag Archives: IRS

The IRS Is Using Private Debt Collectors Who Will Make Calls, but This Actually Changes Nothing

Sometimes fraud prevention can be boiled down to nice, simple rules that don’t leave much room for subtlety. Never wire money to a stranger. Just keeping that one rule in mind will keep you out of a lot of trouble, even if you forget the details of the scams that utilize the technique.

The IRS will never call you was another one of those hard rules, but as of 2017, it’s become a little more complicated. However, for the most part, nothing has really changed when it comes to fraud prevention.

Basically, the IRS will be contracting with four collection agencies, who will only be contacting certain taxpayers who have been delinquent for a significant period of time, whom the IRS has been unable to locate, and who meet certain other criteria. Furthermore, the collectors will not be demanding payments. Instead, they will be directing taxpayers toward electronic options for paying the IRS directly.

This means that some people will be getting calls from collection agencies on behalf of the IRS. The rest of the fraud prevention rules still apply: if they threaten you with incarceration or demand immediate payment, it’s a scam. If they’re talking about wiring money or loading up gift cards, it’s a scam.

Since con artists are nothing if not adaptable, I’ll add this point: if they do anything other than tell you about how you can pay the IRS directly on your own, it’s a scam. I’m sure someone is already gearing up to make calls claiming to be a collection agency, then telling victims they can pay over the phone with a credit card, with a wire transfer or with prepaid gift cards, or by visiting a fraudulent website. The collection agencies the IRS is using will not be asking for nor accepting payments from delinquent taxpayers. At all.

The actual website where you can pay your taxes, overdue or otherwise, is IRS.gov/Pay. And that’s pretty much the only thing the collection agencies contracted by the IRS are going to be allowed to tell you. Any mention of a different website to pay your taxes? Scam.

I recommend reading the full article below for more detailed information.

Prevent tax identity theft with an Identity Protection PIN

UPDATE 3/8/16: Or don’t get a PIN. According to KrebsOnSecurity.com, and as seen on the IRS site linked below, there have been some major security issues with the Identity Protection PIN system, and for now the service has been suspended. Once again, it took identity thieves around four seconds to figure out how to abuse a feature designed to protect your personal information and prevent tax return fraud.

I’ve written plenty of times about not opening emails that appear to come from the IRS (because of malware and/or phishing), but there is another type of crime that ramps up during tax season: tax identity theft.

Basically, it works like this: an identity thief already has your information, files a fake tax return in your name (from which a large refund will be due), then has the money directly deposited into an account controlled by the thief.

Most people’s first warning sign is when the IRS rejects their actual tax return because, according to their records, they already submitted one.

One step you can take to prevent this form of identity theft is to get an Identity Protection PIN from the IRS. You’ll have to use this PIN any time you file taxes (it’s not the same as your e-file signature PIN). The IRS will send you a new one every December or early January. Once you’re signed up, you’ll have to use a PIN every year to file your taxes, and you can’t opt out.

I can’t find any information about how long it actually takes to get your PIN from the IRS. If you’re ready to file your taxes now, or if April 15th is approaching (depending on when you read this), it might be better to wait until after you’ve filed this year’s return.

For more information, and to request a PIN, visit the official IRS page at https://www.irs.gov/Individuals/Get-An-Identity-Protection-PIN

How to avoid employment identity theft.

I’ve said many times before that not all identity theft is strictly financial, although other types of theft may have financial implications.

Medical identity theft is used to obtain services or to bilk insurance companies out of money for services that were never given. It can lead to collections activity against the victim, and at worse, false medical records that could be hazardous to the victim’s life.

Criminal identity theft can lead to victims being incarcerated and stuck with false arrest records that are difficult to expunge. It can lead to loss of job opportunities, and in some cases the victim has to hire a criminal defense attorney to get the situation under control.

Employment identity theft can, on the surface, seem like an almost victimless crime. When someone simply uses your personal information to obtain a job, you might not necessarily even find out unless you happen to apply for a position with the same employer (which has happened before). In fact, I’m sure that a lot of the people who actually use stolen information to get jobs think of it as a victimless crime.

However, what happens if the person using your identity to get a job doesn’t pay taxes on their earnings? The IRS will come looking for you.

One of the enduring myths of identity theft is that the person who steals your information is going to be the same person who uses it. This used to be more or less true, in the days before the Internet made things easier for criminals. These days, a more likely scenario for employment identity theft is that one entity steals information from a lot of different people, then sells it to those who need it. As I’ve often said, this is the realm of organized crime. The person who snags your Social Security Number through illicit means is just a middleman.

In other words, the standard rules apply; guard your SSN and be cautious about who you give it to.

Fraudulent job listings are a major source for this form of “retail” identity theft. You have to be extremely careful when applying for jobs online, especially during these times of high unemployment. However, don’t let your guard down when the economy recovers. This stuff is always out there.

First, never give your Social Security Number before a job interview. Any employer talking about a “preliminary background check” is already breaking the law, so you know right away that something is wrong. The second they speak of a preliminary check, refuse and move on.

Second, never provide financial information. If it’s a job that requires a credit check before hiring, they don’t need account numbers for that. They’ll need your Social Security Number, but by the time you’re actually sitting in an office with an interviewer, surrounded by employees, you’re a little safer in giving them the information. Thieves don’t often set up actual office premises—it’s too much work.

Third, be extremely vigilant when applying for jobs online. Do your homework, check up on the company, make sure any emails are from company accounts (like [nameofcompany].[com/org/net]), not free personal addresses (live.com, gmail.com, yahoo.com, etc.). Online application forms are an easy way for fraudulent web sites to harvest personal information. If they’re asking for your Social Security Number, STOP.

Finally, these are far more “work at home” scams on the Internet (and in the Classifieds, in your Inbox and stapled to telephone poles) than there are legitimate home-based job opportunities—the ratio is 54-to-1, according to one source. This means that if you’re looking at an online work-at-home offer, there is a 98% chance that it’s a scam and possibly a front for an identity theft ring. In other words, don’t even bother.

If you’re serious about working from home, your best bet is to contact a staffing agency (preferably a local one with an actual, physical office) and see if they have any leads. Or, you can start your own business and create your own income model. You either have to telecommute (traditional job, only you don’t go to the office much) or create something that people want (whether a product, information, or entertainment content) on your own, and figure out how to monetize it.

Tax Season Scams

Everyone’s favorite time of the year is coming up soon, so to protect yourself from scammers and identity thieves, here are a few quick tips to remember:

  1. The IRS is never going to initiate contact via email. Ever. Even if you filed your taxes online. If there is a problem with your filing, they will contact you via telephone or postal mail.
  2. If the IRS does contact you, they are never going to ask you to “verify” personal information such as your Social Security number, account information, credit card numbers or anything else. They’re the IRS; they already know what they need to know about you.
  3. If you do get a phone call, don’t automatically trust what pops up on caller ID, since this information can be easily spoofed. If they’re asking to verify personal information, it’s probably someone trying to steal your identity.
  4. On a similar note, beware of phone calls at strange times. The IRS isn’t going to call at 1 AM or 11 PM.
  5. If you’re paying someone to prepare your tax return for you, make sure you’re dealing with someone you trust and who knows what they’re doing. It doesn’t matter who prepares your taxes, you are ultimately responsible for what gets filed.
  6. Also beware of tax preparers who make wild claims about how big of a tax return they can obtain for you.
  7. Finally, a lot of large, nationwide tax preparation companies advertise a “service” in which they write you a check before your taxes are even prepared or filed, based on an estimate of what you will receive. While this is not a “scam,” know that these advances are loans, which you will have to pay back with interest. If they give you more than you get back from the IRS, the excess will come out of your pocket.

Like I’ve said before, just about anything can be turned into a scam. The best defense is to be prepared by knowing what to watch out for.

Lastly, If you do get a suspicious email, forward it to phishing@irs.gov. Don’t open any attachments, and don’t click on any links contained in the message. These could infect your computer with spyware or other malicious software.