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IRS Warns of New Scam Involving Bogus Student Tax

by | 26 Dec | fraud, identity theft

The following article, written by Michael Cohn, first appeared on AccountingToday.com on May 27, 2016

The Internal Revenue Service issued a new warning Friday (May 27, 2016)  to taxpayers about bogus phone calls from IRS impersonators demanding payment for a non-existent tax that they call the “federal student tax.”

People Together-1.jpgEven though the tax deadline has come and gone, the IRS noted that scammers continue to use varied strategies to trick people, in this case, students. In this newest twist, they try to convince people to wire money immediately to the scammer. If the victim does not fall quickly enough for this fake “federal student tax,” the scammer threatens to report the student to the police.

“These scams and schemes continue to evolve nationwide, and now they’re trying to trick students,” said IRS Commissioner John Koskinen in a statement. “Taxpayers should remain vigilant and not fall prey to these aggressive calls demanding immediate payment of a tax supposedly owed.

On Tuesday, the Treasury Inspector General for Tax Administration announced the arrests of five IRS phone scammers in Miami (see TIGTA Arrests 5 Phone Scammers in Miami).

Scam artists frequently masquerade as being from the IRS, a tax company and sometimes even a state revenue department. Many scammers use threats to intimidate and bully people into paying a tax bill, the IRS noted. They may even threaten to arrest, deport or revoke the driver’s license of their victim if they don’t get the money.

Some examples of the varied tactics seen this year are:CTA_Tax_Return_Fraud_Ebook_2016.png

• Demanding immediate tax payment for taxes owed on an iTunes gift card.

• Soliciting W-2 information from payroll and human resources professionals

• “Verifying” tax return information over the phone

• Pretending to be from the tax preparation industry

Related read: What to do if You Are a Victim of Tax-Related Identity Theft 

The IRS is urging taxpayers to stay vigilant against these calls and to know the telltale signs of a scam demanding payment.

The IRS noted that it will never:

• Call to demand immediate payment over the phone, nor will the agency call about taxes owed without first having mailed you a bill.

• Threaten to immediately bring in local police or other law-enforcement groups to have a taxpayer arrested for not paying.

• Demand that a taxpayer pay taxes without first giving the opportunity to question or appeal the amount owed.

• Require a taxpayer to use a specific payment method for taxes, such as a prepaid debit card.

• Ask for credit or debit card numbers over the phone.

If taxpayers get a phone call from someone claiming to be from the IRS and asking for money and the taxpayer doesn’t owe taxes, here’s what to do:

• Do not give out any information. Hang up immediately.

• Contact TIGTA to report the call. Use the “IRS Impersonation Scam Reporting” web page or call (800) 366-4484.

• Report it to the Federal Trade Commission by visiting FTC.gov and clicking on “File a Consumer Complaint.” Please add “IRS Telephone Scam” in the notes.

• If you or a client thinks taxes are owed, call the IRS directly at 1-800-829-1040.

Additional reading: Half of All Americans Expect Identity Theft to Cause a Financial Loss in the Next Year. 

More information on how to report phishing or phone scams is available on IRS.gov.

If you think you may be a victim of a tax-related scam or identity theft, contact me at hkass@zinnerco.com or 216.831.0733  or any of the professionals on staff. We have the answers to  guide you and the resources to help you recover. 

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Since 1938, Zinner has counseled individuals and businesses from start-up to succession. At Zinner, we strive to ensure we understand your business and recognize threats that could impact your financial situation.
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