Latest IRS Tax Scams 2016: Warnings Issued
New scam 1: IRS Warning: Fake Tax Bills & Affordable Care Act Scam
The Internal Revenue Service has been getting reports from across the country of a new scam in which individuals have been receiving fake tax forms by email that indicate they underreported their income as related to Affordable Care Act coverage in 2014.
The forms are coming as email attachments containing what are called CP2000 notices, which are generally sent to taxpayers when income reported from a third-party source, such as an employer, doesn’t match what the taxpayer reports on his return. These fake tax bills are dated for the 2016 tax year. The IRS is warning consumers and tax professionals to not click or open the attachments.
IRS Notice CP 2000 – Notice of Underreported Income
IRS Notice CP 2000 is referred to as the Notice of Proposed Adjustment for Underpayment/Overpayment and is the most common notice sent out by the IRS. The IRS compares informational returns filed by companies on Forms W-2, 1098, 1099, etc. with information as reported by the taxpayer on their return, and issues a CP 2000 if they find differences in income, deductions, credits, and/or payments. A CP2000 notice is typically mailed to taxpayers through regular mail, but these new scammers are sending the notice via email. They’re also demanding that taxpayers mail checks made out to “IRS,” which is something you should absolutely never do.
The IRS says that it has received numerous reports of the scam which involves an email with an attachment. The email attachment is typically a fake CP2000 notices for the tax year 2015. That’s your first red flag: a real CP2000 notice is mailed to taxpayers through the U.S. Postal Service. It is never sent as part of an email to taxpayers.
Here’s what to look for:
Some of the telltale signs of this scam:
– The IRS does not send CP2000 notices – or initiate contact with taxpayers – by email or social media platforms.
– This fake email looks like it’s been issued out of an Austin, Texas, address.
- The fake CP2000 notices appear to be issued from an Austin, Texas, address;
- The underreported issue is related to the Affordable Care Act (ACA) requesting information regarding 2014 coverage;
- The payment voucher lists the letter number as 105C;
- The fake CP2000 notice included a payment request that taxpayers mail a check made out to “I.R.S.” to the “Austin Processing Center” at a Post Office Box address; and
What should you do if you get a CP 2000 notice?
To protect yourself, take time with any notice or email or phone call that you think is coming from the IRS. Too many fraudsters use consumers’ fear of taxes to talk unsuspecting, honest citizens out of quick cash.
Don’t panic. (Easier said than done.) “The IRS doesn’t understand that people act as though they’ve been arrested,” says William Stevenson, an enrolled agent in Merrick, N.Y. “People get really upset, and they visit that hysteria on us who are already hysterical.”
Take a look at your letter. In the upper right hand corner, there should be an AUR Control # and just below that in tiny type: “Notice: CP2000”. If that’s the case, at least you’re not dealing with a correspondence audit, aka an audit by mail, where the IRS asks for additional information about certain items such as business expenses, and it’s not an office audit or a field audit, examinations where the IRS goes into greater detail in person on a host of issues. Nevertheless, the CP 2000 is serious, and if you don’t respond, you’ll face additional penalties and interest and a real bill.
The CP 2000 notice isn’t actually a bill, although it looks like one at first glance. The first line item reads: “2016 Tax Increase.” Check out the IRS frequently asked questions about CP 2000 notices. Question: “Is this a bill? Answer: “No.” Note to the IRS: Put that Q&A on the first page of the CP 2000 notice, and you might calm some nerves.
If you receive this scam email, do not respond and do not open the attachment. Forward the email to firstname.lastname@example.org and then delete it.
To help you determine if a CP2000 notice you received in the mail is real, you can compare it to a sample CP2000 notice from IRS found here (downloads as a pdf).
Typically, a CP2000 is generated when income reported from third-party sources (like your employer) does not match what is reported on the tax return. The notice provides instructions about what to do next.
(For more about how to respond to a real CP2000 notice, check out this prior post from Forbes staffer Ashlea Ebeling.)
The issue has been reported to the Treasury Inspector General for Tax Administration for investigation.
If you get an email asking you to visit a website or answer personal questions, do not reply and do not click on any links in the email.
New scam 2: Student puts $1,762 on iTunes cards to pay IRS
The man claimed to be from the Internal Revenue Service and had her name and home address. She owed back taxes and taxes for school, he said, and she needed to pay now or be arrested.
“He said, ‘You’re going to be receiving a call from 911 and if you pick that up, you’ll be arrested,’ ” said Passino, who is majoring in agricultural technology. Sure enough, 911 appeared on her phone.
“I’m a college student. Being arrested for a college student looks really terrible, so I was really worried,” she said. “That can affect your financial aid … really mess up your life.”
So ultimately, she drove to a Kroger store and put her money on iTunes gift cards, just like the IRS impostor instructed.
To be sure, some retailers and banks try to train their front-line employees to watch out for consumers who may be potential victims. But Passino said she received no questions from a clerk who rang up her purchase.
It wasn’t by chance that the young college student was told to drive to Kroger, which stocks iTunes cards that can range in value from $15 to $500.
Some other stores I visited in metro Detroit, including Target and Meijer, only stocked $100 iTunes cards or cards for smaller denominations.
Once scam victims put money on iTunes cards, they’re asked to read the 16-digit code off the back of the card and scammers can get the cash in a quick, clean, often untraceable way — and leave their victims with nothing.