You do your taxes every year. Your taxes are pretty simple, so you do them yourself. No big deal. You get a small refund and you think you’re done.
Then you get a letter from the IRS.
A Letter from the IRS
You open the mail one day to a letter from the IRS indicating that you actually owe them a bit of money back. You still earned a refund, but because there was an error in your taxes, you need to pay back a small amount. Let’s say it’s $150. Kind of a bummer, but you still got a refund, so you’re not too worried. Besides, you did your taxes yourself, so it’s entirely possible you missed something. Not a big deal.
You go onto IRS.gov, click the option to pay your taxes and submit the payment. Pretty easy.
A Second Letter from the IRS
Then a second letter comes. They took a closer look at your taxes and you screwed up bigger than you thought. They received your $150 payment, but bad news, you actually owe them $2500. The letter says you need to contact them to setup a payment plan. Man, you really screwed up your taxes, didn’t you.
So you call the number and work with the person on the line to setup a payment plan. You give the person your bank account information and setup the payment plan. You’re definitely frustrated with the situation.
This May Be an IRS Scam
We’re all familiar with the scams where you receive a phone call telling you that you owe money, but getting a letter in the mail seems unusual, doesn’t it? And this one sent you to the IRS website (in fact, you typed in irs.gov, you didn’t click a link). So yes, you did submit that initial payment to the IRS, but the second payment? The payment plan you created? That was giving your information to the scammers. This is definitely a long con, but they got you.
In the cases I’ve heard about, the scammers aren’t pulling more money than you agreed to – they’re just sticking to the payment plan that you setup. The only way to stop them is to contact your bank and likely close your account.
How do you keep yourself safe?
First off, the IRS does not accept payments over the phone. Never give your information over the phone.
If you receive one of these letters, don’t call the number provided. Go to the IRS website and call the number listed there. Only make payments through the official website, never through any other service.
Scammers are getting smarter and smarter. Make sure that you don’t fall for the latest IRS Audit Scam
Megan is a 40-something government employee in the Washington, DC area. She got interested in Personal Finance when she got out of college and realized that her paycheck wasn’t going to go as far as she had hoped. Since starting this blog, she has managed to buy a house and make a solid start on her retirement goals, and hopes to help others do the same. Here is her story:
In 2007, I was a gainfully employed 20-something with no debt but not a lot of knowledge about personal finance. It was a co-worker’s comment about Roth IRAs that sent me to the internet, searching for information. It was then that I realized that I really didn’t know a whole lot about personal finance and that my current financial situation was due a lot to inherent frugal tendencies, generous family members, a fear of debt, and good luck. While that was working for me, clearly I needed a better plan.
While I had no debt, I was also pretty much living paycheck to paycheck and not worrying about going over budget (I say this as if I had a real budget) because I had an emergency fund set aside to cover any overages.
Except that’s not what an emergency fund is for.
So I did a lot of research, read a lot of blogs, and decided that I needed a plan. I needed to budget. I needed to know what I was spending my money on. I needed to prepare for the future.
I decided to create a blog not only to make myself accountable to others but also to share the knowledge that I gained along the way. I’ve learned so much from my fellow bloggers, and I hope that my readers can find something useful in what I have to share as well.
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