Beware of the Newest IRS Scam: What to Tell Clients
Have you heard about the new high-level telephone scam targeting taxpayers and making the rounds all over the country?
The callers say they are IRS employees, but of course, they are not. The scammers use fake names and false identification to convince consumers that they're the real deal since they make the caller ID to show IRS. They even know a lot about a citizen on the other end of the line.
The con artist tells victims that they owe money to the federal agency and demand that it be paid promptly through a wire transfer or a pre-loaded debit card. If a target refuses, they receive threats like an arrest or suspension of a driver's license. The con artist becomes hostile and insulting. Some victims hear the promise of a refund to trick them into sharing private information. If the phone goes unanswered, the scammer leaves an "urgent" callback.
Other ways the scam works is to send a false IRS form (CP 2000) and claim that the income reported on the return does not match the income stated by an employer or even Social Security. The con artist claims this has to do with the Affordable Care Act. They hope to worry and confuse you and make you feel vulnerable. They'll follow-up with emails with attached forms, text messages, and more calls in hopes to scare you. The scammers want to retrieve your Social Security number, date of birth, and other personal data to use and steal your identity. They will offer a fake "protection plan" to get your credit card number.
Please remember - the IRS will never contact you to collect overdue taxes by an email, text message, or a phone call. Other things the IRS will never do:
- Call and require instant payment. The IRS will never make you buy a prepaid debit card, gift card or wire transfer. The federal agency will mail the bill if you owe taxes.
- The IRS will never threaten to call local authorities and the police to arrest you for the outstanding debt.
- Demand that you pay taxes without giving you the opportunity to question or appeal the amount owed.
- Get a credit or debit card number over the phone.
If you receive an email, text messages, mail or even live calls concerning money you owe, do not respond. Just hang up the telephone. If you get a "CP 2000" form in the mail, call the IRS at 1-800-366-4484 to confirm it is a scam. The federal agency saw close to 400 percent surge in phishing and malware incidents in the 2016 tax season, so beware.
If you click on the link that's in the email, it leads you to a website designed to emulate the official-looking IRS.gov website. While at the fake site, they ask for your Social Security number and more personal data and use the information to file a false tax return. The fake website may carry malware, which infects the citizen's computer to allow the con artist to access private archives or track keystrokes to gain information.
The threat remains high, but variations of the IRS impersonation scam continue year-round.
Don’t Be Tempted to Persuade Your Clients
Recently, I've been seeing a lot of articles about Advisors persuading clients to move from active management to passive management. Persuading clients to follow the way you manage investments is a big mistake. Do this instead.
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