Taxes can become your worst nightmare. One of the daunting aspects about moving to the U.S. was having to deal with the new taxation system. Moving from Canada to the U.S. with brokerage accounts, real estate ownership and other assets meant that our tax filing for last year was complex and needed professional attention. Not having a social security number meant that I had to file for an Individual Tax Identification Number (ITIN) in conjunction with our tax returns. It seemed like such a tedious task that we decided to pay extra money to hire a good tax accountant in order to avoid all the hassle and potential complications.
One Friday morning, my well-deserved coffee break was interrupted by a phone call from a number in New York. The woman on the other end of the line had a heavy accent and identified herself as 'Jess'. She told me that she was calling from the Investigative Department of IRS. Initially, I was not panicked and listened in as I figured that she was simply calling me to provide some useful information. What followed was a three minute roller coaster ride of emotions consisting of confusion, panic, horror and lastly, anger.
'We are calling you to follow up on the case that the IRS has against you regarding tax evasion. We have sent you the necessary documents. This call is being recorded for quality assurance purposes and we are on a three way conference call with the Department of Homeland Security because you are in violation of the constitution of the United States'. As soon as she mentioned Department of Homeland Security, my heart skipped several beats. My skepticism was replaced with sheer terror and I tried to steady my voice as I bombarded her with the questions that were running through my head:
'What exactly is this case about?'
'It is regarding the Federal Taxes that you have not paid'
'But I have not filed my taxes for 2015 yet and I have only lived in the United States for 6 months'
'But you are currently living in the state of Georgia right?'
'Yes, but I am not currently employed'
'That may be true but this is a fixed amount that you owe as Federal taxes'
That last statement invited the doubts back in. The papers for my application for an ITIN were still sitting on my dresser, waiting to be mailed. I knew that since I did not have a social security number, there is no way that the IRS would have any kind of information on me yet. As I proceeded to question her further, I heard her voice flailing till she gave up and hung up on me.
I am one of the lucky few who was not duped in to revealing personal information or worse: paying thousands of dollars to these scam artists. That day, I immediately called the IRS and filed a detailed complaint online with The Treasury Inspector General for Tax Administration (TIGTA).
How to spot the scammers
First telltale sign is that they will be calling you from a phone number with an area code as opposed to an 800 number. Most of the time, they will not provide you with a badge number and if you ask for one, they will get flustered and aggressive. It is a good idea to ask them to verify their identity as it will throw them off their game.
Secondly, the IRS never establishes personal contact over the phone. If there is a problem, they will be contacting you through U.S. mail. Because let's face it, with the tax season in full swing, do they really have the time to contact millions of people who are potentially breaking the law? Some of these scammers will try to tell you that a letter has been sent. If they do, it is a good idea to ask some probing questions to see what the contents of this letter that they are claiming to have sent are.
Thirdly, the IRS would never threaten to sue you, send you to jail or even deport you. A plethora of these calls will throw a threat or two your way to try and unnerve you. Therefore, these threats are an indicative sign of a prank call.
Try to call the number back. When you do, someone will answer with a simple 'Hello' as opposed to a greeting that clearly states that you are calling the IRS. Furthermore, calls to IRS offices are always answered by an automated system first, indicating that you are calling a legitimate government agency.
If you are new to the U.S. and are dealing with the tax system for the first time, these kinds of calls will definitely rattle you. Unfortunately, these scammers are working around the clock to swindle thousands of dollars out of gullible victims. So do your research, inform yourself, be aware and make sure that you never give out any personal or financial information.