Beware, tax scams come in many forms

It seems every year there are new tax scams that appear.

Honest Americans become the target, and many times the victim of, various tax scams. A person has to be diligent and informed not to inadvertently be caught up in these attempts by dishonest individuals to fleece you of your hardearned money.

The IRS has identified several new variations of standard tax scams involving phony tax bills and demands for payments. Many of these scams involve purchasing and transferring information using a gift card or iTunes card. Some of the most common scams include the following.

In the Electronic Funds Tax Payment System Scam, the con artists claim to be from the IRS. Scammers call and demand immediate tax payment and threaten arrest if a payment is not immediately made through a specific method such a prepaid debit card immediately. Victims are also instructed not to speak with their tax preparer, attorney or local IRS office until the payment has been made.

The calls are very intimidating and even wellinformed individuals are forced to question whether it may be true. One of my wealthy medical doctor clients was driving and told that if they did not pull over immediately and make the payment they would be arrested and that the IRS knew where they were.

Another common scam is the Private Debt Collection Scam. The IRS recently sent letters to taxpayers with overdue federal balances assigning the collection efforts to four specific private collection agencies. Scammers are taking advantage of this and are now calling taxpayers posing as private collection firms.

If you receive a call requesting payment you would have been notified numerous times in writing directly by the IRS before any third-party collection efforts are attempted. If you believe that you do not have a balance due with the IRS there is an extremely high probably you do not and you should treat any collection calls as if they are a scam.

You need to protect yourself against all types of scam attempts including tax related scams.

Given the level of sophistication and perseverance of scammers it is often difficult to separate legitimate communication from the IRS from those ploys to get your money and personal information.

Recently I was targeted myself in a scam when I was selling some things on Craigslist. The unfortunate thing is that the bank and the police really said that there was nothing that can be done and that it was just fortunate for me that I detected it prior to releasing information. Unfortunately, too many people fall for these scams that are often impossible to investigate and prosecute.

As a guideline, the IRS will never contact you initially by phone or demand payment by prepaid debit cards, gift cards or wire transfers.

The IRS will also never threaten to bring in local police or other law-enforcement officials to have the taxpayer arrested for nonpayment.

The IRS will never demand that taxes be paid without giving the taxpayer the opportunity to question or appeal the balance due.

The IRS will never ask for credit or debit card numbers or other sensitive information by phone. The IRS also does not use email and will not send you and email.

Remember that the IRS will mail a bill to taxpayers that owe. All payments should be made the United States Treasury and all correspondence is handled in writing. If you are contacted via phone or through some other method do not give out any information. You should hang up immediately and report the scam to Treasury Inspector General for Tax Administration at 800-366-4484 or www. treasury.gov/tigta/contact_ report_scam.shtml .

If you are unsure about any potential outstanding tax obligations you should contact your tax preparer or the IRS directly at 800-8291040. Paul Pahoresky is a partner in the accounting firm of JLP CPAs. He can be reached at 440-974-1040x14 or at paul@jlpcpas.com. Consult your tax advisor for your specific situation for additional information and guidance on these topics.

Paul Pahoresky