Whether it’s a social media post with misinformation about tax filing or a text message or phone call from someone claiming to be collecting money owed, the Internal Revenue Service is reminding taxpayers to be vigilant when it comes to tax scams.
Danny Werfel, commissioner of the IRS, said in an interview with the Tribune the “exponential growth of tax scams” is “particularly challenging” for the agency as society and the tax system evolve, making taxes more complex.
“The world is changing rapidly with more filers, more tax law changes, more currencies and more globalization, which can lead to scams that are victimizing innocent taxpayers and in particular, vulnerable populations,” Werfel said.
While in Chicago, Werfel said much of his time would be spent meeting with the “hundreds of IRS employees” that work in the area to discuss ways the IRS can do better and also meeting with stakeholders, such as local tax professionals, to hear from the people on the ground and those who work in low-income and distressed communities to increase tax literacy and awareness of tax scams.
Social media, with all its bells and whistles, is also home to a lot of misinformation. Werfel said tax scams can occur when people follow the advice given in a 30-second or minute-long video on social media talking about getting “free money” from the IRS by claiming certain tax credits or exemptions.
“You can go on Youtube to learn how to fold a fitted sheet, but going on Youtube to figure out what tax credit you’re eligible for is a huge mistake, and it’s getting people in trouble,” he said. “This tax season in particular, we see a substantial growth in the number of filers coming in with exorbitant credit claims.”
While tax scams are not new to the digital age, the virality of the fraud has changed. Werfel said that a video claiming to help people get more money will have thousands of views in no time because that kind of content generates traffic. The speed at which misinformation can spread can then lead to a significant amount of tax fraud.
Filing a frivolous claim means the tax return will get held up, Werfel said, and the taxpayer faces “hefty penalties.” It becomes a “bigger and bigger” problem for the taxpayer because not only are they not getting the money they thought they would see, they then have to work with the IRS to “clean up the mess that was created by submitting an erroneous claim on their tax return,” Werfel said.
Another common scheme going around is people impersonating IRS employees and reaching out to collect payments, Werfel said. IRS impersonators will text, call or email claiming to be an agent contacting a person about tax debt that must be paid immediately. Werfel said the IRS will never reach out for the first time via a text, phone call or email but rather a letter that is sent to a home or business address.
Werfel also said that the IRS does not threaten immediate legal action when first reaching out about any payments due.
“A first letter basically lays out why we’re reaching out and gives you plenty of time to respond,” Werfel said. “We don’t threaten to bring in the local police, and we don’t use scare tactics.”
Scammers will often say a person is in big trouble, Werfel said, and will claim the repossession of property or another major action if payment isn’t made immediately.
Werfel said vulnerable populations, including the elderly, are at greater risk of being targets for scams.
The IRS has walk-in centers around the country, and one in downtown Chicago is at 230 S. Dearborn St. Customer service representatives with the IRS are available to help get tax issues resolved in person.
You can also get help over the phone by reaching out to an IRS call center. While the IRS has different 1-800 numbers for different purposes, Werfel said the primary one that is of service to most people is 1-800-829-1040.