Tax fraud1has a pretty broad definition. It occurs when someone purposely falsifies information on a tax return for their own personal gain. They might report false income, claim false deductions or expenses, or use a false social security number to file an altogether false income tax return. It becomes a tax scam when a fraudster intentionally deceives an innocent party with the intention of somehow making them the victim of their fraudulent scheme. They might use your name, address, and social security number to file a fraudulent tax return.
As tax season approaches, many people will begin to get their finances in order. Others of course, will wait until the last minute. Be advised however, that fraudsters do not procrastinate. Sadly, there are bad actors out there looking to swindle the unsuspecting during tax season. Your cash, your credit, even your identity could be their objective. But if you arm yourself with a basic understanding of a few Internal Revenue Service (IRS) policies, you’ll be better equipped to avoid being misled by scammers. Here are three facts you can rely on when it comes to the IRS.
To chat with a representative or report potential fraud, contact Member Services at (512) 467-8080 or (800) 252-8311.
The IRS Will Never Cold Call You About Debt
Their policy is to always mail you a bill first. So if you have not received a physical letter in the mail, the call could be suspect. It is possible however that a letter was lost in the mail or your address is not current. To be sure, you can ask the IRS representative to allow you to call them back at (800) 829-1040. You could also ask to speak to someone in the fraud department, or express your concern about recent phone scams. Any legitimate IRS employee will be happy to comply.
The IRS Will Never Demand Immediate Payment
Their policy is to allow you the opportunity to appeal, and even set up a payment plan, in which you can define how you pay. They would never require that you use any specific payment method, least of all a prepaid debit card. And they would never suggest that you share any debit or credit card information over the phone. Any requests along these lines are very likely fraudulent.
The IRS Will Never Threaten You
A legitimate IRS representative will never intimidate you or make threats of legal action. They would never involve local police or any other law enforcement agency for that matter. If a supposed representative uses these kinds of tactics, it is highly likely that you are speaking to a scam artist at work.
If someone claiming to be with the IRS does any of these things, report them immediately. You can also call the IRS Tax Fraud Hotline recording at (800) 829-0433 to learn more.
1 UFCU does not provide tax or legal advice. For such guidance, please consult a tax and/or legal advisor.
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FAQs
Commissioner Werfel said that is not how the IRS operates. When it comes the IRS contacting people about tax returns, Werfel said there are three things the IRS will never do. The IRS will never contact you by email, text, or phone. Werfel said the first way the IRS will contact you is by letter.
What can the IRS not touch? ›
The IRS can't seize certain personal items, such as necessary schoolbooks, clothing, undelivered mail and certain amounts of furniture and household items. The IRS also can't seize your primary home without court approval.
What is IRS Dirty Dozen? ›
The Dirty Dozen represents the worst of the worst tax scams.
Compiled annually, the Dirty Dozen lists a variety of common scams that taxpayers may encounter anytime but many of these schemes peak during filing season as people prepare their returns or hire someone to help with their taxes.
Why is the IRS feared? ›
The agency's authority to collect taxes is real and powerful, which can strike fear in a lot of taxpayers. Despite its scary reputation, the IRS system for spotting problematic returns isn't personal.
What are 3 main responsibilities of the IRS? ›
The Internal Revenue Service (IRS) administers the federal tax laws that Congress enacts. The IRS performs three main functions—tax return processing, taxpayer services, and enforcement.
Can the IRS look at your phone? ›
It turns out that the IRS is using devices known as IMSI Catchers, “Stingrays” or cell cite simulators. It isn't exactly a phone tap, but it does mean there is data gathering going on. You might not know about it, and it could infringe on your privacy rights.
What assets cannot be seized by the IRS? ›
Here are the items they can't seize: Work tools at or below a certain amount. Personal assets at or below a certain amount. Furniture valued at or below a certain amount.
What is the IRS cash rule? ›
Generally, any person in a trade or business who receives more than $10,000 in cash in a single transaction or related transactions must complete a Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or BusinessPDF.
What is the IRS allowed amount for food? ›
(Cases Filed Between April 1, 2023 and May 14, 2023, Inclusive)
| Expense | One Person | Four Persons |
|---|
| Food | $431 | $1,028 |
| Housekeeping supplies | $40 | $85 |
| Apparel & services | $99 | $279 |
| Personal care products & services | $45 | $96 |
2 more rowsApr 1, 2023
The rate for meal and incidental expenses for travel in the continental US remains at $69 per day. For outside the continental US, it's $74 per day. The incidental expenses only deduction remains at $5 per day for any travel inside or outside of the continental US. Incidental expenses are defined by Rev.
The IRS sometimes makes changes because of a miscalculation. The IRS might also believe, based on other information on the return, that you're eligible for a credit you didn't claim.
Is the IRS targeting poor people? ›
The latest Internal Revenue Service (IRS) statistics covering federal income tax audits through February of 2022 reveals that the agency is continuing to target audits on the poorest wage earners. So far it has completed 132,922 audits of these low-income wage earners with less than $25,000 in total gross receipts.
Has anyone ever beaten the IRS? ›
Surprisingly, taxpayers win some or all of their cases against the IRS about 14% of the time. Attorney Counsel represented more of those cases than not. And only 6% of those who tried without a tax attorney won, and their attempts were based on frivolous arguments.
What would happen if we abolish the IRS? ›
"Annual tax returns and W-2s would cease to exist. People who make their money on the black market would be taxed at the same rate as anyone else. The enormous compliance costs currently associated with filing one's annual taxes would be cut significantly.
Who controls the IRS? ›
The IRS is organized to carry out the responsibilities of the secretary of the Treasury under section 7801 of the Internal Revenue Code. The secretary has full authority to administer and enforce the internal revenue laws and has the power to create an agency to enforce these laws.
Who is the IRS owned by? ›
The Internal Revenue Service (IRS) is the revenue service for the United States federal government, which is responsible for collecting U.S. federal taxes and administering the Internal Revenue Code, the main body of the federal statutory tax law.
Can IRS see your bank account? ›
The Short Answer: Yes. Share: The IRS probably already knows about many of your financial accounts, and the IRS can get information on how much is there. But, in reality, the IRS rarely digs deeper into your bank and financial accounts unless you're being audited or the IRS is collecting back taxes from you.
What assets can the IRS seize? ›
The IRS may levy (seize) assets such as wages, bank accounts, Social Security benefits, and retirement income. The IRS also may seize your property (including your car, boat, or real estate) and sell the property to satisfy the tax debt.
What triggers IRS investigation? ›
The IRS receives copies of your W-2s and 1099s, and their systems automatically compare this data to the amounts you report on your tax return. A discrepancy, such as a 1099 that isn't reported on your return, could trigger further review.
Can the IRS touch your bank account? ›
An IRS levy permits the legal seizure of your property to satisfy a tax debt. It can garnish wages, take money in your bank or other financial account, seize and sell your vehicle(s), real estate and other personal property.
