Inevitably, tax season comes, and with it some new form of scam to watch out for.
The Internal Revenue Service recently issued an alert to taxpayers and tax professionals to be on guard against fake emails purporting to contain an IRS tax bill related to the Affordable Care Act (ACA).
Generally, the scam involves an email that includes a fake CP2000—a notice commonly mailed to taxpayers through the U.S. Postal Service—as an attachment. In reality, this document is never sent as part of an email to taxpayers—the IRS does not initiate contact with taxpayers by email or through social media. Here are some other ways to spot the scam:
- The CP2000 notice appears to be issued from an Austin, Texas, address
- The tax issue is related to the ACA and the notice requests information regarding 2014 coverage
- The payment voucher lists the letter number as 105C.
The fraudulent CP2000 notice includes a payment request for a check made out to “I.R.S.” be sent to the “Austin Processing Center” at a post office box address. This is in addition to a “payment” link within the email itself. Don’t do it!
The IRS website (www.irs.gov) lists some of the most prevalent IRS impersonation scams, which include:
- Demanding payment for a “Federal Student Tax.”
- Demanding immediate tax payment for taxes owed by paying with an iTunes or other type of gift card
- Soliciting W-2 information from payroll and human resources professionals
- Attempts to “verify” tax return information over the phone such as Social Security or bank account numbers
- Pretending to be from the tax preparation industry
Remember, neither the IRS nor the California Franchise Tax Board (FTB) will ever:
- Call and demand immediate payment and threaten arrest.
- Call without giving consumers an opportunity to discuss a potential tax dispute.
- Call and ask for your credit card numbers.
- Call and ask for payment via pre-paid debit cards.
If you get a suspicious phone call from someone claiming to be from the IRS and asking for money or personal information, do not give out anything. Hang up immediately. You can always call the IRS directly at (800) 829-1040 if you think you owe taxes. FTB urges taxpayers to report any suspicious emails or phone calls received from tax scammers through its website at www.ftb.ca.gov, which also has additional fraud protection tips. FTB will contact a taxpayer by mail—often several times—prior to calling directly. FTB also uses an automated dialer program and a copy of that program’s message can be found on FTB’s website.
If you go with a pro:
California is one of the few states to have set requirements for professional tax preparers, according to the California Tax Education Council (CTEC). State law requires anyone who prepares tax returns for a fee to be either an attorney, certified public accountant (CPA), CTEC registered tax preparer (CRTP) or enrolled agent (EA). Choosing a tax preparer who is not one of those four professionals may prevent you from legal recourse against fraud. It may also increase your chances for additional taxes, interest and fines.
Always verify the legal status of a tax preparer before handing over your private tax information. To verify whether a person or firm is currently authorized to practice public accounting in California, check the license on the California Board of Accountancy’s website at www.dca.ca.gov/cba/ and visit its “Tax Resources” and “Consumer Assistance” sections for more information.