The IRS imposter scam has been the #1 most reported scam to BBB the last two years. To help people in the community recognize a tax scam, we always gave the advice that the IRS will never call you to collect an outstanding tax debt.
However, the IRS has changed the way it deals with overdue taxes, and that means third party collection agencies may now call you on the phone. A federal law signed in 2015 lets four contractors collect unpaid tax debts for the government. According to the IRS, these are unpaid tax debts that were assessed several years ago and which the agency is no longer trying to collect directly.
Like the IRS, BBB is concerned this change might lead to scammers trying new ways to trick people. There are many ways to tell whether a call you receive about tax debts is legitimate.
According to the IRS, people with overdue taxes will always receive multiple contacts, including letters and phone calls, from the IRS first. The IRS will also always notify taxpayers before sending their accounts to a private collection agency.
Here’s how it will work, and how you can tell the difference between a legitimate debt collector and a scammer:
The IRS and the private debt collection company will both send a letter to the taxpayer first. If you get a call first and had no idea you owed taxes, be cautious.
Private debt collectors will be able to identify themselves as contractors of the IRS collecting taxes. These employees must comply with the Fair Debt Collection Practices Act and, like IRS employees, must be courteous and respect taxpayers’ rights. If the caller yells, curses, or threatens to have you arrested, it is not a legitimate collector. Just hang up.
Private debt collectors will not ask for, and cannot accept, credit card information over the phone. Consumers will pay the IRS directly and will not need to send any money to the private debt collection company. You can check this page for payment options: https://www.irs.gov/payments. You can also see your balance and payment history. If the caller asks you to pay them directly, and especially if they ask for an unusual form of payment such as wire transfer or gift cards, it’s a scam. Just hang up!
The IRS has stated that private collection firms will only be calling about tax debts that people have had for years and that they have been contacted about previously. Taxpayers can confirm unpaid tax debt by visiting irs.gov/balancedue.
Start with Trust® For more information, visit bbb.org/irscalls.
~ Shelley Polansky, VP/Marketing, Communications & Outreach