Financial Planning Focus - Client Question: I received a letter from the IRS notifying me of an audit. Is it a scam? How do I reply?

February 28, 2017

Letter scams are not as common as email and phone call scams. The Internal Revenue Service (IRS) prepares an annual "Dirty Dozen" list of tax scams which is topped by identity theft, but with phone scams and internet phishing schemes high on the list. As always, clients should guard against any ploys to steal personal information, including tax-related, designed to scam them out of money or talk them into engaging in questionable behavior.

According to the IRS, if you receive a letter, notice or form via paper mail or fax from an individual claiming to represent the IRS, go to the IRS home page and search on the letter, notice, or form number. Does the letter appear legitimate or does it appear to be modified? You can also find information at “Understanding Your Notice or Letter” or by searching “Forms and Pubs” on the IRS website. If it is legitimate, you'll find instructions on how to respond or complete the form.

If you don't find information on the IRS website or the instructions are different from what you were told to do in the letter, notice or form, call 1-800-829-1040 to determine if it’s legitimate.

If it doesn’t appear to be legitimate, report the incident to the IRS.

With regard to the more common email and phone call scams, the IRS reminds people that they will never:

  • Call to demand immediate payment, nor will the IRS call about taxes owed without first having mailed you a bill.
  • Demand that you pay taxes without giving you the opportunity to question or appeal the amount the IRS says you owe.
  • Require you to use a specific payment method for your taxes, such as a prepaid debit card.
  • Ask for credit or debit card numbers over the phone.
  • Threaten to bring in local police or other law-enforcement groups to have you arrested for not paying.

With a new tax season upon us, “trust but verify” should be your watchwords if you receive any unusual communication purported to be from the IRS.