Taxpayers beware! Phony “IRS” letters may be coming your way!

January 17, 2017 by Jean Lee Scherkey, EA
Money background with SCAM written on top with block letters

Tax season! It’s that time of year when holiday revelers turn into paper hunters, finding that their thrift store donation receipts were repurposed into coasters, and watching the mailbox for the arrival of W-2s becomes an American pastime. If filing taxes at the first of the year is not challenging enough, a new scam against taxpayers is gaining momentum. Thieves are creating very convincing IRS CP2000 letters and sending them to unsuspecting taxpayers via the postal service and as an attachment to an email feigning to be from the “IRS.” These forged letters are so good that even Uncle Sam just might take the bait!

Generally, the IRS sends out CP2000 letters when the income and/or payment (withholding) information listed on a filed income tax return does not match the information the IRS received from other third parties. These third parties are employers, banks, investment and pension companies. The IRS provides on their website detailed information that describes the contents of CP2000 notices, including the steps explaining how a taxpayer may dispute the tax return changes listed on the notice.

These scam artists are not only looking to make an “easy” buck, they are hoping to steal taxpayers banking information and identities. The fake CP2000 letters lure people into the trap of believing they owe money to the IRS on their 2014 or 2015 income tax returns due to the Affordable Care Act. Because the reporting and payment requirements surrounding the Affordable Care Act are still relatively new, many taxpayers assume these false letters are correct, and submit payment ─ even personal information that can be used to steal their identity. These imposters also feed on the fears many have of the IRS, banking on the assumption people will go ahead and pay the amount listed rather than contact the IRS. Taxpayers who are less afraid of the IRS ─ but more afraid of the time they will wait on hold trying to speak with an IRS representative by phone ─ will just go ahead and send in the payment.

As good as these fake letters are, there a few nuanced errors in the letters to alert the recipient that something is afoul. Here are a couple of telltale signs that a CP2000 notice may be fraudulent:
 

  • Taxpayers are instructed to make their check or money order out to the “I.R.S.” A genuine CP2000 will instruct taxpayers to make their payment out to the “United States Treasury.”
  • Taxpayers are instructed to send their payments to the “Austin Processing Center, P.O. Box 15264, Austin, TX 78761-5264.” Although the IRS does have a processing center in Austin, TX, the address on these bogus letters is not the correct address.
  • The included payment voucher lists the letter number as “105C.” This is not correct.
  • Many of these notices are being sent electronically via an email attachment. The IRS never initiates contact with a taxpayer via email.
One of the best ways to combat the rise in tax scams is to take proactive measures.
 
  • If you have an audit defense membership for the tax year of the notice, report your notice to TaxAudit.com and we’ll do the work and the worrying for you!
  • Compare the CP2000 notice received with a sample of a real CP2000 notice posted on the IRS website at Understanding Your CP2000 Notice.
  • A CP2000 letter originating from the IRS will provide detailed information about why the tax increased and how to send a dispute response if you do not agree.
  • When in doubt, ask. Dust off a good, long book, pour a tall glass of lemonade, and contact the IRS by phone. The IRS Tax Help Line for Individuals is 1-800-829-1040.
  • Don’t have time to call and wait on-hold? You can request a Tax Account Transcript online or by mail. This transcript will show changes made to your account after your original return was filed.
  • Report bogus letters and emails to the Treasury Inspector General for Tax Administration (TIGTA) and to the IRS.
  • Get the word out. Warning family members and friends, especially the elderly, helps ensure these scammers will not win.

Tags: CP2000, scams

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Jean Lee Scherkey, EA
Learning Content Developer

 

Jean Lee Scherkey began her career at TaxAudit in 2015, and her current title is Learning Content Developer. She became an Enrolled Agent in 2005. For several years, Jean owned a successful tax practice that specialized in individual, California and trust taxation, and assisting those impacted by tax identity theft. With over fifteen years of varied experience in the field of taxation, Jean has worked at different private tax firms as a Staff Practitioner, Tax Analyst, and Researcher. Before coming to TaxAudit, she worked over two years for TurboTax as an “Ask the Tax Expert.” In addition to her work in TaxAudit’s Learning and Development Department, Jean is actively involved in the company’s ENGAGE Volunteer Program, which provides opportunities for employees to help and serve the local community.  


 

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This blog does not provide legal, financial, accounting, or tax advice. The content on this blog is “as is” and carries no warranties. TaxAudit does not warrant or guarantee the accuracy, reliability, and completeness of the content of this blog. Content may become out of date as tax laws change. TaxAudit may, but has no obligation to monitor or respond to comments.