Under 35? Things to know about IRS tax scams

Young man with mustache, talking on his mobile phone, not sure if he's just received an IRS tax scam call.Image: Young man with mustache, talking on his mobile phone, not sure if he's just received an IRS tax scam call.

In a Nutshell

People fall victim to all kinds of scams every day — but if you’re younger than 35, you may be particularly at risk of getting ripped off in an IRS impersonation scam. Learning the signs of a scam could help you protect yourself this tax season.
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This article was fact-checked by our editors and Rachel Weatherly, tax product specialist with Credit Karma.

On the list of phone calls no one wants to get, a call from the IRS is probably near the top.

That fear is what scammers are counting on when they call thousands of Americans every year, claiming to be IRS representatives and demanding bogus tax payments.

In fact, since 2013 more than 2.3 million reports of IRS impersonation scam calls have poured into the office of the Treasury Inspector General for Tax Administration. And more than 13,500 victims have reported losses of more than $67 million.

Actually, the IRS says it will never call a taxpayer out of the blue to demand payment before mailing an actual tax bill. So if you get an IRS collections call but haven’t received a tax bill, that’s probably a red flag.

Here are some other things to know …

The younger you are, the harder you may fall

IRS tax collection phone scams are alive, well and continuing to con American taxpayers. And while you may think seniors would be the likeliest victims, research by the Better Business Bureau shows that people ages 25 to 34 are actually more prone to fall for such scams — and more likely to lose money in them.

According to the BBB, 69% of victims are younger than 45, and 78% hold a college or graduate degree.

What’s more, research by communications tech company First Orion shows that while young people receive fewer scam calls than those in other generations, they’re more likely to give personal information like their Social Security numbers or credit card information to phone scammers.

In addition to potentially losing money, you could expose yourself to identity theft by giving out your personal information. Or, crooks could use your Social Security number and other personal info to file a fraudulent tax return and steal any tax refund you’re owed.

Recognizing a bogus phone call

If you’re new to filing taxes, or you aren’t sure whether you might owe the IRS any money, it is especially important to know the signs of an IRS tax scam. A lack of confidence can make you more vulnerable.

According to the IRS, a tax collection scam typically works like this:

  • You receive a phone call from someone claiming to be an officer of the U.S. Treasury, IRS or other government agency. It may initially be a recording threatening you with arrest if you don’t call back.
  • The caller is demanding, aggressive and hostile. The person will insist you immediately pay a considerable sum of money for “back taxes.”
  • The caller states or implies that if you don’t pay immediately over the phone you will be arrested.
  • In addition to a credit card or bank account, the person may demand payment through cash, a wire transfer, prepaid debit card or gift card.

But the IRS doesn’t work that way. Many of the things scammers do are actions the IRS would never take, including:

  • Calling to demand immediate payment without first mailing you a bill
  • Demanding a specific payment method
  • Threatening to have you arrested if you don’t pay
  • Demanding payment without giving you the opportunity to question or appeal the amount you may owe
  • Asking for payment information like a debit or credit card number over the phone

The IRS initiates all collections requests by U.S. mail. So if you get a phone call without having first received a bill, be skeptical of the call.

Other types of IRS scams

Calling on the phone is not the only way these con artists attempt to contact you. Sometimes the scammers use phishing — contacting you by email — in an attempt to commit tax fraud.

With phishing, a scammer may send what looks like a legitimate email from a recognizable company. The goal is to get you to provide your personal and financial information in a reply.

But the IRS never sends unsolicited emails to taxpayers, so be wary of unexpected emails from anyone claiming to from be the IRS. If the email asks for personal information, states something about your tax account or refers to taxes associated with a large investment, inheritance or lottery — those are also indicators of a scam.

If you get a scam email, don’t reply to it. Do not open any attachments or click on any links. Doing this can infect your computer or mobile phone with a virus. The IRS advises you to forward phishing emails to phishing@irs.gov.

Learn your rights as a taxpayer

What to do if you get a scam call

If you do get one of those fake IRS collection calls, the first thing you should do is write down the number on your caller ID, then immediately hang up without providing any information to the caller. Be aware that the scammer might have used technology to disguise their phone number to make it look like the call is from the IRS or another official agency.

If you know you don’t owe the IRS, you should report the scam to TIGTA through its online portal and to the Federal Trade Commission through its FTC Complaint Assistant. Make a note that your complaint is related to “IRS Telephone Scams.”

Not sure whether you actually owe any money? You can call the IRS directly at (800) 829-1040. An IRS representative can help you determine if you owe anything or are in the clear. You can also view your tax account online at IRS.gov. You’ll need to create an account if you don’t already have one. If you do have an existing account, you’ll be able to log in and see any balance you may owe. You’ll also be able to securely pay any balance online.

Get tips to help lower your risk of tax identity theft

Bottom line

Crooks continue to use IRS tax scams to try to bilk Americans out of their money. Their aggressive, threatening tactics are intended to pressure you into acting before you have a chance to really evaluate the scammer’s claims and threats.

You can reduce your risk of falling for this kind of scam by never allowing someone to pressure you into a financial move over the phone. Always take time to think before acting. Research any request that involves giving up your money by phone or email.

Rachel Weatherly is a tax product specialist with Credit Karma. She studied accounting and finance at Western Carolina University and has also worked as a tax analyst. You can find her on LinkedIn.

About the author: Trina Hargrove has managed tax, consulting and payroll accounting businesses for more than a decade. A seasoned tax professional, she’s performed individual and corporate tax preparation of both state and federal retu… Read more.