Consumer Reports: Spot a tax scam

5 things the IRS will never do

Tax season is rife with scammers using clever ways to scare you into handing over your money. Hundreds of thousands of people have been targeted in the past few years. Consumer Reports tells you how to spot a scam so you don't become a victim.

Alex Gutierrez' nightmare started with a phone call allegedly from an IRS official. He was told his tax refund was a mistake and he had to return it that day or else.

"If I didn't send the money, they gonna cut me, all my rights, I can't travel, I can't use my  money in the bank," he said.

Panicked, Gutierrez wired $700 to a scam artist in Peru before he realized he'd been had.

"The U.S. Treasury Department says that this scam has been perpetrated in just about every state, and estimates that thousands of people have been defrauded of more than $26 million," explained Margot Gilman, Chief Money Editor for Consumer Reports.

It can happen to anyone. This threatening message was left on the home phone of a Consumer Reports employee: “I’m calling regarding an enforcement action executed by the U.S. Treasury.” When she called back, she was told she could avoid arrest by immediately wiring more than $6,000 to clear her record.

The scammer said, “You need to go to the bank first; you need to withdraw the money in cash.”

When she balked, he threatened her by adding, “We’ll send the officers and you’ll be arrested.”

Consumer Reports says it’s critical to know that the IRS never calls out of the blue. If you have a tax problem, you’ll almost always be contacted by mail first.

Other things the IRS will never do:

  • Demand immediate payment.
  • Threaten imminent arrest or other enforcement action.
  • Require a specific payment method like a prepaid debit card.
  • Request confidential information on the phone.

If you suspect that a call you get is a tax scam, report it to the Treasury Inspector General for Tax Administration at 1 (800) 366-4484 or file a complaint online at FTCComplaintAssistant.gov.