Mark Twain once said that the opposite of “progress” was “Congress” and it is hard to disagree with him when you consider the law recently passed by Congress requiring the IRS to use the services of private collection agencies to collect outstanding taxes.  This law is flawed on many levels including, as was pointed out by the IRS Taxpayer Advocate Service, the fact that this program not only had been tried unsuccessfully twice previously, but also actually is not cost effective.  But from my perspective, perhaps the greatest problem with this new law is that it increases the likelihood of scammers being able to pose as tax collectors and lure unsuspecting victims into paying these scammers money.

During the last two years, the Treasury Inspector General for Tax Administration received more than 736,000 complaints by people about telephone calls received from scammers posing as IRS agents attempting to collect overdue taxes.  The Treasury Inspector General also noted that approximately 4,550 victims paid more than 23 million dollars to criminals using this scam and this figure is probably low.  Until now, it was easy to know if the person calling you attempting to collect an overdue tax bill on behalf of the IRS was legitimate.  If you received a call, it was a scam.  The IRS does not initiate attempts to collect overdue taxes by telephone.  Now, however, collection agencies will actually be calling on behalf of the IRS to collect overdue taxes making it very difficult to know if the call you receive is legitimate or not.

TIPS

As I have often said, whenever you get a phone call, you can never be sure who is really on the other end of the line.  Even your Caller ID can be fooled by a technique called Spoofing by which it can be made to appear that your call is coming from someone other than the real caller.  It is for this reason that I advise you never to give out personal information such as your Social Security number or credit card information to anyone who calls you on the phone unless you have absolutely confirmed that they are legitimate.  In the case of a call from someone purporting to be collecting a debt on behalf of the IRS, you should not give them any information or agree to do anything on the phone.  Ask them to send you written information about the alleged debt and then call the IRS to find out if the debt is legitimate or not.