As tax scams grow more sophisticated with new technology, the best line of defense, according to a tax professional, is understanding how the IRS communicates with taxpayers and distinguishing between legitimate and fake correspondence.
Evolution of Tax Scams
Modern tax scams have evolved over the course of the last decade. Today’s scammers, now equipped with generative AI and automated phishing technology, employ a mix of high-pressure tactics and technological savvy to appear legitimate, often creating a false sense of urgency to trick victims into acting without thinking.
Speaking with Checkpoint, Jane Ditelberg, chief tax strategist at The Northern Trust Institute, provided a clear example by sharing a recent scammer’s voicemail. The message offered “emergency penalty relief under the ‘Fresh Start initiative'” but encouraged immediate action, as “these spots fill up fast.”
This tactic exploits the anxiety many taxpayers feel about taxes. “People are terrified” of the IRS and are “terrified of getting entangled with them,” Ditelberg said, noting that this fear makes them a target. Scammers attempt to entice victims with a false incentive like penalty relief, or intimidate victims if they do not comply with their instructions, suggesting they will “garnish your wages or … put a lien on your house,” she explained.
Scammers also demand immediate payment through untraceable methods. “We’ve heard people being told to deposit cash in a crypto ATM,” Ditelberg observed. The IRS states explicitly that it will never demand payment via gift cards or wire transfer, and that a request to pay a tax bill at a cryptocurrency ATM is always fraudulent. Taxpayers always have the right to review, question, and dispute a bill from the IRS before paying it.
IRS Defaults to Mail
The first line of defense against these scams is understanding how the IRS operates. The agency’s official guidance on how to know if it’s really the IRS confirms that its first contact is almost always a “computer generated” letter delivered by the U.S. Postal Service, said Ditelberg.
A legitimate notice from the IRS is specific and informational, not threatening. Ditelberg stated that a real notice contains details from the tax return in question, such as a reference to a specific line item. “‘On line 17 of Schedule B of your 2020 individual [Form] 1040, you reported this number, and we think it should be this number,'” she gave as an example. Scammers thrive on vagueness, and a generic demand for money without reference to a specific tax year or form is a red flag.
While mail is the primary starting point, the IRS may follow up through other channels. Agents may call to discuss an ongoing audit or collection case after initial mail contact, and the agency will only use email or text messages with a taxpayer’s explicit permission. An in-person visit from an IRS agent is rare but typically preceded by several letters.
According to the IRS, several types of employees may make such visits, though each has a specific role. Revenue agents, for instance, conduct audits and will contact a taxpayer by mail first to schedule a meeting. Revenue officers are civilian employees who work on collection issues. Officers will mail several notices but may visit a home or business if those attempts go unanswered.
Proactive Steps to Safeguard Your Information
Taxpayers have the right to verify an agent’s identity. Legitimate agents will carry two official forms of identification: a pocket commission and an HSPD-12 card, per the agency. “Both have the employee’s serial number and photo,” says the IRS. “If the person doesn’t show you these IDs or you aren’t sure about them, call the number on the card provided by the revenue officer or agent,” taxpayers are advised.
Ditelberg’s “biggest piece of advice for avoiding the scammers” is to create an IRS account. By opening an online IRS account, taxpayers can see their own tax records, including balances owed and copies of notices. If a taxpayer receives a suspicious message or letter, any claims made on a potentially fake document can be cross-referenced with information in the official agency account, Ditelberg pointed out.
For an added layer of security and peace of mind, taxpayers can voluntarily opt into the IRS’ Identity Protection PIN program, receiving a six-digit number that helps prevent identity thieves from filing fraudulent returns.
Another proactive step is choosing to file taxes electronically. E-filing significantly reduces the risks associated with paper returns, which require manual data entry. Ditelberg explained that this manual process creates “way, way more chances” for errors, such as transposed numbers or misread handwriting. These mistakes can trigger an incorrect notice, creating unnecessary confusion. Secure e-filing transmits data directly, ensuring greater accuracy.
If a taxpayer receives a communication they suspect is a scam, they should not engage. The IRS has dedicated channels for reporting impersonation scams or other suspicious activity directly to the agency. Ditelberg emphasized the importance of seeking guidance from a trusted source. She urged taxpayers to “work with people you trust, and get help if something comes up,” she said. “Never hurts to double-check.”
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