Con Artists Target People Who Owe The IRS Money
In one scheme, thieves will offer to "help" you pay back taxes, only to leave you on the hook for expensive fees in addition to the taxes.
With tax season under way, the IRS is once again warning taxpayers to be wary of “Offer in Compromise” scams. These promotions claim that they can help taxpayers pay back taxes for just “pennies on the dollar.” Victims often end up paying the promoters thousands of dollars in fees and still end up owing money to the IRS.
While the IRS’s Offer in Compromise program allows taxpayers to request a reduction in unpaid taxes, the guidelines are strict, and only a small percentage of applications are approved. To be eligible for the program, you must be up to date on your tax returns and have received at least one bill from the IRS. You’ll be required to provide supporting documents, including a breakdown of your expenses. The IRS will then review your income and the assets you own, such as equity in your home, to determine whether you’re eligible to have some of your tax debts forgiven. If it determines that you can afford to repay your taxes in full through an installment program, it will likely reject your offer.
You can find out if you prequalify for the OIC program by going to https://irs.treasury.gov/oic_pre_qualifier. The IRS charges a $250 application fee but waives it for low-income taxpayers.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Bank impersonation scams. Consumers also need to be on the lookout for con artists who claim to be fraud officers from their bank. Here’s how it works: You receive a fraud alert via text or e-mail asking you to verify a purchase you didn’t make. Respond “no” and you’ll receive a phone call from a fraud impersonator requesting personal information, such as your username and password, in order to “catch” the scammer. The imposter then uses that information to drain your account. Never give out sensitive information over the phone or send money to people you don’t know. Hang up and contact your bank if you’re not certain a call is legitimate. While your bank may ask you to verify your identity or account information, this usually happens when you initiate the call.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
Rivan joined Kiplinger on Leap Day 2016 as a reporter for Kiplinger's Personal Finance magazine. A Michigan native, she graduated from the University of Michigan in 2014 and from there freelanced as a local copy editor and proofreader, and served as a research assistant to a local Detroit journalist. Her work has been featured in the Ann Arbor Observer and Sage Business Researcher. She is currently assistant editor, personal finance at The Washington Post.
-
Stock Market Today: Stocks Shrink From Highs as CPI Looms
The Nasdaq hit a new record early Tuesday but drifted lower into the closing bell.
By David Dittman Published
-
Tax Pros: Is Someone Fraudulently Using Your IRS PTIN?
Tax Filing An unmonitored preparer tax identification number (PTIN) can lead to serious issues.
By Kelley R. Taylor Published
-
IRS Shakeup? What Trump's Commissioner Pick Could Mean for Taxes
IRS An unconventional nominee comes amid broader efforts to reshape the IRS and tax policy in 2025.
By Kelley R. Taylor Published
-
IRS Could Lose Another $20 Billion in Funding
IRS A mistake in legislative language could soon risk the tax agency's Inflation Reduction Act funding.
By Gabriella Cruz-Martínez Published
-
Two Consequential Tax Cases You May Not Have Heard About
The Supreme Court's decisions in these cases create uncertainty about challenging IRS regulations and guidance. Expect more litigation to follow.
By John M. Goralka Published
-
Sometimes It Pays to 'Blow the Whistle' on IRS Tax Evaders
Tax Fraud The IRS recently awarded three IRS whistleblowers $74 million. Here's why.
By Kate Schubel Published
-
The Big CPA Shortage Problem in Accounting
Career This once resilient accounting industry is cracking, as the labor force seems in dire straits. It’s also affecting the IRS.
By Gabriella Cruz-Martínez Last updated
-
IRS Skirts TikTok Ban to Sniff Out Tax Scammers
Tax Scams Social media scams caused thousands to file inaccurate returns. What does that have to do with TikTok?
By Kate Schubel Published
-
Who Does the IRS Audit the Most?
Audits The IRS has a $400K audit directive problem. Here’s what you need to know.
By Kelley R. Taylor Last updated
-
IRS Hauls Back $1.3 Billion From High-Income Earners
Tax Filing Certain income and wealth levels can trigger an IRS audit. Here's what you need to know.
By Kate Schubel Published