It has been somewhat of an epidemic. Lots of taxpayers have received calls from persons who claim to be from the IRS and who assert that the recipient of the call has an outstanding federal tax liability. The caller then threatens some kind of draconian penalty (e.g., the police will be immediately dispatched to arrest the recipient of the call) unless immediate payment is made by wire transfer, debit card, or some other mechanism whereby the caller can extort some quick money.
The IRS has tried to inform the public that these calls are phony and that a person who receives such a call should simply hang up the phone. The IRS has stated over and over that it does not call people and threaten to send the police or engage in similar types of activities when taxpayers have an outstanding debt with the IRS. If a taxpayer legitimately owes federal taxes, the first contact that he or she will have with the IRS regarding this liability will be by letter and not through a phone call.
Notwithstanding the IRS’ admonition that the first time a taxpayer hears from the IRS will not be by a phone call (at least when it pertains to the collection of a tax debt), apparently the IRS has, in limited audit cases, initially contacted taxpayers by phone.
Due to the volume of fraudulent phone calls from persons who claim to be from the IRS, taxpayers are now, understandably, skeptical when receiving a call from someone who purports to be a representative from the IRS. Similar to the lesson learned from the fable of Aesop of the boy who cried wolf, when a legitimate call is made by a representative from the IRS, taxpayers now sometimes think that it’s fake.
In the overwhelming majority of cases, when the IRS initially contacted a taxpayer regarding the commencement of an audit, it was done by mail. In a small number of cases, however, (mainly in-person field audits), a representative from the IRS would make the initial contact with the taxpayer by phone to set up the audit appointment. The phone call would then be followed up with a letter confirming the appointment.
The IRS has recently received complaints from taxpayers and their representatives that these telephone contacts were confusing because of the recent spate of fraudulent collection calls by IRS representative impersonators. Many taxpayers did not believe that the person from the IRS who was calling to advise the taxpayer that his or her return had been selected for audit was really a representative of the IRS.
As a result of this confusion and the complaints that have been expressed to the IRS, the IRS recently issued a statement indicating that it will implement a policy that the initial taxpayer notification in the case of all audits will be done by mail. In other words, no more phone calls (at least not at the beginning). Once the initial contact by mail has been made, an IRS representative may then contact the taxpayer to schedule an appointment.
The IRS is hopeful that this new policy will eliminate any confusion that taxpayers may have as to whether a call from the IRS is legitimate. Generally speaking, if the phone call is the first time that the taxpayer is hearing from the IRS, it should be assumed that it’s a scam.