If a robotic voice is leaving multiple messages on your phone warning you that the Internal Revenue Service is filing a lawsuit against you, you’re understandably concerned. In all likelihood, the phone message warns that a “legal petition” will soon be filed in the “federal claims courthouse.” It might even say that there is a warrant for your arrest. Before you panic—or, worse yet, dial the number the caller left for you—take some time to consider whether this call is fake. The chances are that it is.
The IRS Doesn’t Have to Sue You to Collect
If a caller tells you that the IRS is going to sue you, you can be certain this call is false for one simple reason: the IRS doesn’t have to sue you to collect. Unlike most other creditors, the IRS can take collection actions against you directly, such as placing a lien on a home (it will get paid out of any sales proceeds) or garnishing your wages(money will be taken out of your paycheck). The IRS also has other collection tools at its disposal, such as withholding your tax refund, auctioning off your property, or deducting funds from your Social Security check.
You’ll find out about the IRS’s intentions in advance because the IRS will send you a letter before taking collection actions against you. This letter will give you contact information and instructions for requesting a hearing before any collection action begins. You should speak with a tax lawyer to discuss your options if you receive such a letter.
The IRS Will Contact You By Mail
If you owe money for previous tax years, the first time the IRS contacts you won’t be by phone, but by letter (and sometimes by certified mail). You can expect to continue to get many letters explaining how much you owe for specific years.
Authorized Collection Agencies
In 2017, the IRS began sending old tax accounts to collection agencies. These collection agencies can call you, but since these accounts are old, you should already know about them from previous IRS communications. The first time you learn you owe taxes should not come from a telephone call.
The IRS uses the following collection agencies:
- CBE Group, 1309 Technology Parkway, Cedar Falls, IA 50613
- ConServe, 200 CrossKeys Office Park, Fairport, NY 14450
- Performant, 333 N. Canyons Parkway, Livermore, CA 94551
- Pioneer Credit Recovery, 325 Daniel Zenker Drive, Horseheads, NY 14845
How to Spot an IRS Scam
Don’t fall for a scam. There are ways to tell a fake call from a real one. According to tips provided by the IRS, a real collection agent for the IRS will not:
- call you before you receive a letter telling you the account is in collections
- threaten to arrest or deport you, or
- ask you to pay them directly with your credit card, gift card, prepaid debit card or wire transfer.
You should be suspicious of anyone from another agency who tells you that they’re collecting on behalf ot IRS. Also, protect your Social Security number, credit card number or bank account information (don’t give it out). Finally, never make out a check to the collector. You’ll pay electronically through IRS.gov/Pay You Tax Bill or you’ll make a check out to the U.S. Treasury.
Can the IRS Bring Criminal Charges Against Me?
The IRS prosecutes about 3,000 people per year for criminal tax fraud and other financial crimes; however, the IRS does not call to tell people that they intend to prosecute them. If you receive a call from someone threatening you with jail time for an unpaid tax bill, it’s not the IRS.
The IRS brings criminal charges against taxpayers only if an investigation indicates there was criminal activity. Usually, a tax audit occurs first, then an investigation. The IRS sends a letter to begin the audit process. It won’t initiate an audit with a phone call.
Also, be aware that not every audit results in an investigation, and not every investigation results in charges. If you think you might be the subject of a criminal investigation by the IRS, contact a tax professional for guidance.
Questions For Your Attorney
- Can you handle an IRS collection call on my behalf?
- The IRS found some problems in my audit. Should I worry about a criminal investigation?
- Can you represent me in an audit or investigation?