Originally published on Forbes.com.
After all this time it seems that IRS phone scams are still a thing. The IRS does not actually call people up and demand immediate payment nor threaten to have the local police come and arrest you. If they think you owe them money they contact you by snail mail with progressively more threatening letters. Eventually one of the letters will tell you they are going to start hitting you with liens and levies. That’s the one to watch out for.
At least until the coming spring anybody calling you out of the blue has nothing to do with the IRS. We’ll come back to what is coming in the spring, but first I would like to look at how it is that this IRS phone scamming can still be a thing.
Tools Of The Trade
I got some insight from a recent Ninth Circuit decision. Douglas Stroms York was appealing his conviction for violating 18 USC 912.
Whoever falsely assumes or pretends to be an officer or employee acting under the authority of the United States or any department, agency or officer thereof, and acts as such, or in such pretended character demands or obtains any money, paper, document, or thing of value, shall be fined under this title or imprisoned not more than three years, or both.
As it happens Mr. York had other things in mind than making money from impersonating an IRS agent and he was seen through quickly. He was calling his wife’s new boyfriend. Regardless, that is not the important information in the decision. What is revealed is the tools that are available to would-be IRS impersonators.
Here, the government presented evidence that York used a paid “spoofing” application to select a false return phone number ending in the digits “1040,” and to modify his voice to sound like a woman. In the voice mail, York announced himself as Judy Smith “with the IRS, Internal Revenue Service”; stated the call was related to a tax audit; noted an interest in checking the recipient’s records for three specific years; requested a return call at the false “1040” phone number he had selected; and used “we” in reference to a plan to continue pursuing records in relation to the audit. This evidence was sufficient to establish an intent to deceive the individual called into changing his course of action, at least by investigating or calling the number specified.
York presented no evidence refuting that intent. He argued to the jury that some of the government’s evidence—the altered voice, which he characterized as an obvious ruse, and the unprofessional language used in the message—demonstrated that he did not genuinely attempt to impersonate or act as an IRS employee.
That the impersonation may have been flawed does not explain why, if he intended nothing but annoyance to result from the call, York would have changed his voice to a “woman’s” through a paid service; requested tax records by phone, as is consistent with legitimate IRS investigations; or provided a call-back number ending in “1040,” a number that matches not only a common income tax form, but also the last four digits of a legitimate IRS help line. The recipient’s actual response—to run an Internet search on the call-back number—was the minimum York could have intended, given the content and form of the call, yet went beyond simple annoyance.
The company that facilitated this, Teltech Systems, through a service called SpoofCard sent somebody to testify against Mr. York. Teltech’s description of the service is – “Easily Disguise Your Caller ID – Display a different number to protect yourself or pull a prank.” Frankly, my reading of this is that there may have been a bit too much prosecutorial zeal at work here, but maybe that comes from a guilty conscience on my part.
Tax Season Fun
I think the statute of limitations has run so I can probably confess to the way my buddies and I flirted with 18 USC 912 back in the day. What’s the point of having a CPA in the family if he doesn’t do your tax return for free? That provided the fuel for the prank.
On a special day that happens to be just a couple of weeks before the end of tax season, we would get on the speakerphone and each of us would call a family member of one of the others pretending to be an IRS agent with questions about that persons return. Having the return in front of us strengthened the credibility. It was particularly satisfying to pull the prank on my brother who often used his ATT job to pull jokes on the family. He one time convinced my mother to put a paper bag over the phone while they blew the dust out the lines. Ah, the good old days.
At any rate, you see from the case excerpt some of the tools available to IRS impersonators. There are some other factors that help. IRS collections is overwhelmed and under-resourced, so there is a decent chance that when a scammer calls the person answering is one of the millions of people with unworked collections cases, who has been nervously waiting for the other shoe to drop.
Just Hang Up
The simplest rule to follow is to hang up on any strangers who call you either offering a great deal, soliciting charitable contributions, or threatening you with IRS action. I make an exception for the people offering free stuff in exchange for attending a timeshare presentation. Just be sure to look at what timeshares sell for on the secondary market before you go into the session and view the session as advanced sales training by someone who has just been given the “Always be closing” speech from Glengarry Glen Ross (Sorry I can’t give you the link for that, given the language).
Which brings us to what will be happening in the spring. People who owe the IRS money will be getting phone calls from people who are legitimately supposed to be calling them. They won’t be working for the IRS directly but for one of the companies that have been contracted to chase down delinquent accounts – Performant Recovery, Pioneer Credit Recovery, CBE Group and ConServe Accounts Receivable Management. My advice here is a little complicated, so pay attention. I really think you should pay your taxes, just because it is the right thing to do. I recognize, though, that not everybody thinks that way. So here is the deal.
And Keep Hanging Up
If all the snail mail you got from the IRS did not convince you that you should pay them, you can safely hang up on any of the four companies. All they can really do is annoy you. The best deal they can offer is a full pay installment deal. They have no authority to enter into any sort of other deal and, more significantly no authority to initiate liens and levies. Once your account is a bit over four years old the late file penalty has maxed out, so the only thing you are saving after that is interest, which, compared to credit card interest, is not that onerous. And there is light at the end of the tunnel – a ten-year statute on collections.
If your strategy is passively-aggressively waiting out the ten-year statute, the turnover to the collection companies is probably good news. While they have it, the clock keeps ticking. In order for you to be receiving the nasty stuff – liens and levies – your account has to be handed back to the IRS. Maybe the ball will get dropped in the handoff. How tragic would that be?
So ]even after the IRS approved collection companies go into action, the safest course is probably just to hang up on threatening calls purportedly coming from the IRS.