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How to Help Clients Who Are Targeted by Scammers

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With the rising reports from the IRS of identity theft through scams executed over the telephone or via email, state, local, and federal officials are encouraging the public not to, in any form, submit personal or financial information or data to unsolicited callers or emailers.

On March 14, while we were all worried about corporate tax day, the IRS issued Notice IR-2016-40, which discusses phone and email scams that taxpayers have encountered lately. If you are anything like me, you have been getting frantic calls from clients about these scams for a long time now. By the time the IRS got around to warning taxpayers, we had already been alerted by our clients.

About two and a half years ago, I was driving home from Miami to Orlando. My business partner and I were down in South Florida visiting with clients. I received a frantic text from a client that the IRS was on the phone with her. The caller told her she owed the IRS money.

Now, we all know that sometimes the IRS will call clients or show up at their home or place of business; however, I knew it was a scam when I called my client to get more information. When I called, my client told me the “IRS officer” told her to get a prepaid Visa card for $1,000 and someone would come to her home and pick it up.

The IRS doesn’t work that way. First of all, if a client has received a call from a revenue agent, the client would have received at least a couple of letters from the IRS that, hopefully, he or she has given you. On top of that, if the IRS did call, the agency would never have demanded payment in the form of a prepaid Visa card.

About a year later, I got a frantic phone call from a client, and the scam had become more elaborate. She stated the IRS had called and said there was a warrant for her arrest for unpaid taxes. Once the caller hung up, the phone rang again, and on the caller ID was the phone number for the local sheriff’s department. The caller said a deputy was on the way to arrest my client.

After that call, my client called me. As you could probably guess, she was extremely upset. While on the phone with me, the phony IRS officer called back, and I asked her to patch me through on the conversation. She did. I asked the person on the phone what this call was all about, and the person said there was a warrant for my client’s arrest for unpaid taxes. When I stated that not paying your income taxes wasn’t a criminal offense, the scammer went on to say that the warrant was for tax evasion. So, I asked the scammer for his badge number. I do a lot of representation work, so I know the sequence of badge numbers, and the scammer didn’t give me enough numbers. I told the scammer that his badge number wasn’t enough numbers and told my client to hang up.

Several years ago, the scammers would send taxpayers emails. The emails would say something about trying to initiate a deposit or a refund into the taxpayer’s account, but having the wrong account number. Potential targets were told by persistent and aggressive scammers that they were entitled to large tax refunds or they owed money and had to pay immediately. They were instructed to click a link and put in their correct bank account information. Another email told recipients that their Social Security number was incorrect and it needed to be updated before their tax return could be processed. After clicking the link, it would take you to an official-looking site where you would put in your name and Social Security number.

There was a big advertising campaign around the fact that the IRS never sends emails, and that put an end to those emails. Problem was that this all happened about 15 years ago, and people have short memories. These email phishing scams are back once again. Remember, the IRS never sends emails. If an email or call you receive from someone claiming to be from the IRS is suspicious or doesn’t feel right to you, it may well be a scam.

Scammers have even tried targeting tax professionals, stating that our e-services password is set to expire, and if we don’t change it, we will be locked out. Now, this one can be alarming. E-services will send you an email when your password is going to expire, but you will never be locked out of e-services. If you try to log into e-services after your password expires, all that happens is you have to change your password. You aren’t locked out.

In the notice the IRS issued last week, Commissioner John Koskinen stated, “These schemes continue to adapt and evolve in an attempt to catch people off guard just as they are preparing their tax returns. Don’t be fooled. The IRS won’t be calling you out of the blue asking you to verify your personal tax information or aggressively threatening you to make an immediate payment.”

On a final note, remember that it is always our core responsibility to educate our clients. We all know how the IRS works and should be very conscious of failing victims of circumstances. If you get a frantic call from a client, now you know what to do to save a life.


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