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Informed Investor: Beware the latest IRS mail and e-mail scams

In recent years, taxpayers have been besieged with e-mail and telephone scams. The latest scam involves individuals being contacted by parties claiming to represent the IRS and told they owe a penalty as a result of not having health insurance coverage. This week’s column discusses what employees should do if they receive threatening telephone calls, e-mails or mail demanding payment for any reason.

In recent years, taxpayers have been besieged with e-mail scams in which hackers posing as the IRS have been able to obtain individual Social Security numbers and names, together with W2 information, in order to file false individual tax returns. As a result, fraudulently filed tax returns have caused refunds to be issued to the wrong person.

Just recently, a new scam has emerged involving fake tax bills tied to the Affordable Care Act (ACA). Starting in 2014, almost all Americans must be enrolled in some type of a health insurance plan, and must acknowledge that fact when they file their income tax returns. If an individual is not covered by some type of health insurance plan, then he or she will owe a penalty to the IRS. This column discusses what employees should do in case they are the recipients of fraudulent e-mails or mail demanding payment to the IRS.

First and foremost, the IRS never initiates contact to individuals or businesses through e-mail. The IRS contacts individuals and businesses only through the U.S. mail. That being said, because some of the recent fake notices are payer notices sent by U.S. mail, individuals should be on the lookout for them, as well as fake e-mails purporting to be from the IRS.

With regard to the paper notices, some background information is in order. When there is a mismatch between an individual’s tax return and what is reported by a third party on a W2 or 1099, the IRS will mail out a CP2000 notice to the individual. Genuine versions of CP2000 notices are IRS computer-generated. But fake paper CP2000 notices typically ask victims to pay a balance due in connection with ACA health coverage for 2014. According to that law, individuals without proper health insurance coverage owe a penalty.

The fake paper notice makes clever use of language and bold typeface similar to those in legitimate IRS CP2000 correspondence. The fake notice is three pages long, including a payment voucher. Note that a legitimate IRS CP2000 notice is six to eight pages long. The fake paper notice directs the individual’s balance due to be mailed to a P.O. Box, supposedly at the IRS’s Austin Processing Center, and that the check is to be made to “I.R.S.” rather than to the correct payee, the “United States Treasury”.

Federal employees, annuitants and survivor annuitants who are enrolled in the Federal Employees Health Benefits Program (FEHBP) are reminded that FEHBP health insurance coverage is considered creditable coverage under the ACA. This means that an employee or annuitant enrolled in the FEBHP should never receive a notice demanding payment from the IRS under the provisions of the ACA.

The IRS is devoting much time and resources to fighting these scams. As part of this effort, the IRS reminds individuals that the IRS does not:

▪ Initiate contact by telephone, through e-mail or text, or through social media asking for personal or financial information;

▪ Call about taxes owed without first mailing a bill;

▪ Call individuals to demand payment;

▪ Require payment in a certain way, such as with a prepaid debt card, or ask for credit or debit card account numbers over the telephone; or

▪Threaten to bring in local police or other law enforcement groups to arrest an individual who has a balance due on his or her taxes.

In addition to receiving threatening e-mails, individuals have received “phishing” e-mails designed to trick recipients into revealing personal information. Anyone who receives a phishing e-mail should not: (1) Reply to the message or (2) open any attachments or click on links, as these links may have malware that will affect one’s computer. All phishing e-mails should be forwarded to phishing@irs.gov and then deleted from one’s computer.

Any individual who owes taxes to the IRS and is contacted on the telephone by fraudsters demanding payment should immediately hang up and then call the IRS at 1-800-829-1040. The individual should have his or her tax return for the year in question when calling the IRS to see if anything is owed.

Any unwarranted telephone call or phishing e-mail incident also should be reported to the local office of the IRS’s Treasury Inspector General for Tax Administration (TIGTA). A list of local TIGTA phone numbers may be found by going onto the IRS Web site at www.irs.gov, and then under the Search function, enter the word “TIGTA.” Any phishing scams also should be reported to the Federal Trade Commission at www.ftc.gov/complaint.

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