Monday, November 28, 2022

It seems like every day there’s a new scam. Many of them hover between ridiculous and just downright hilarious. I think most of us just shrug it off and think, “Who would fall for this?!” But, there’s always people out there that fall for just about anything.

For example, I think we have all received emails from “Nigerian royalty” pleading for our help. All you need to do is help them funnel their millions of dollars out of Nigeria and into your bank account and you get to keep 30 percent. Wow, what a return on investment! All you have to do is to provide your bank account number (for “safekeeping” the funds of course) and you’re on your way to millions in cash.

For those that are unaware, this is actually a scam. While you may have considered this generous offer, at some point you probably became suspicious as to how this Nigerian prince got your email address in the first place. You probably assume everyone else has that same hesitation. You’d be wrong though. The top Nigerian scammer was recently arrested, and it’s estimated that he’s taken in over $60 million globally. He actually got over $15 million from one person alone. You would think that if someone has $15 million they would make better life decisions. Looks like someone’s financial planner really dropped the ball there.

Unfortunately, the tax world mimics the rest of the world, and new IRS scams pop up daily. While some seem absolutely ridiculous, some may be quite believable if you’re unaware of some basic rules on how the IRS contacts you.

Here’s one you can throw in the ridiculous batch. There’s a recent scam whereby the caller pretends they are from the IRS and you owe a large sum of money that you must pay immediately to avoid legal action. But here’s the kicker…you have to pay with iTunes. That’s right, iTunes. Like the music. You’re told to go to a store, purchase an iTunes gift card, load money onto it and then provide the 16-digit code on the back of the card. This can be done by phone call, text or email. Sometimes, the caller even stays on the phone with you the entire time as you go to the store, purchase the card and provide the code.

It sounds ridiculous, but there are plenty of people falling for this scam. I have a feeling that if you think you can pay the IRS with One Direction songs then you probably are a great candidate to lose a lot of money to a Nigerian prince as well.

Just to be clear, you cannot pay a tax bill with iTunes credit. Here’s some other forms of currency you may not use to pay your tax bill: credit card miles, mitzvah points, IOUs, a promise to donate to a charity of the IRS’s choosing, donuts and cronuts. Note that this is not an all-inclusive list.

The latest scam this summer involves robocalls. Apparently, robocalls are not just for shul announcements and Teaneck elections. Basically, you receive a prerecorded message from the “IRS.” It will use one of two approaches. The message may try to scare you, threatening you with prosecution, deportation or revoking your driver’s license over unpaid taxes. Or it may tell you that you are eligible for a larger refund. Either way, the objective is the same. Their goal is for you to call back and give over your bank account or other sensitive information.

Here’s some basic guidelines about how the IRS interacts with taxpayers, so you won’t ever fall victim to one of these scams. The IRS (1) will always contact you first via snail mail with a tax bill; (2) will never call and demand immediate payment; (3) will not demand you pay your bill in a very specific manner such as prepaid debit cards; (4) will not ask for sensitive information over the phone, such as bank information or credit card numbers; (5) does not threaten to bring in police or other agencies to arrest you for not paying.

Never give out sensitive information to a caller. If you think it’s a scam, then call the Treasury Inspector General for Tax Administration at 800-366-4484 to report the call. If you’re not sure if it’s a scam, then call the IRS at 800-829-1040 and speak to an agent to look at your account.

Daniel Magence, CPA, Esq. is a principal at Pristine CPA Solutions, LLC (www.pristinecpa.com). Pristine CPA Solutions offers tax and accounting services to individuals and businesses of all sizes, whether it’s tax returns, bookkeeping, payroll services or personal income budgeting. He can be reached at [email protected] or 201-326-6908 if you have any questions or comments, or are interested in using Pristine CPA’s services. Feel free to contact us for a free consultation.


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