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Here are some tips on spotting a fake IRS letter and protecting yourself and your business from tax scams.
Why are mail scams so tricky?
If you get an unexpected phone call from “the IRS,” you should hang up right away. The IRS never calls, text messages, or emails taxpayers to notify them of a problem, and they’re definitely not going to send you a message on social media, either. You will always get a letter first.
Financial criminals know what IRS letters look like, though, and they go to painstaking lengths to mimic the government agency. If they can get you to call, email, or go to a website, they’re going to do everything they can to separate you from your hard-earned money.
If you get a letter that says it’s from the IRS, stay calm: it very well may be. Before acting, though, take steps to authenticate it. You can search for the topic or similar letters at IRS.gov, where you may find enough information to verify the letter or solve the issue on your own.
If the letter seems legitimate, but you still have any questions or doubts, you can contact the IRS using one of its public phone numbers, so you know you’re really talking to the IRS.
What does a real IRS letter look like?
The IRS sends letters for many common reasons. Letters from the IRS almost always come before any other form of contact and are delivered by regular U.S. Postal Service mail.
Of course, if you don’t follow up as required, the IRS may contact you through other means, but that’s less common.
Above is an example of a legitimate IRS letter. Note the notice number at top right.
Most IRS letters are called “notices,” and they always contain the IRS logo. You may receive multiple letters or notices for the same issue. The letter should clearly explain the reason for contacting you and what you may need to do in response. Letters always include your rights as a taxpayer. It will also usually include your truncated tax ID number or Social Security number and note a specific tax year.
Here are some common reasons why the IRS may contact you:
- You or your business owe a balance
- Your refund or payment amount was incorrect on your tax return
- The IRS changed your tax return
- The IRS has questions about your past tax return
- The IRS needs to verify your identity or gather additional information
- There will be a delay processing your tax return
Real IRS notices contain a notice number (CP) or letter number (LTR) on the page’s top or bottom right corner. You can search for that notice type on the IRS website to get specific information to help guide your next steps.
If you do get any correspondence from the IRS, you should keep a copy of the letter on file until the problem is fully resolved. To be safe, the IRS recommends keeping tax records for a minimum of seven years in some cases.
9 ways to spot a fake IRS letter
If a fake IRS letter shows up in your mailbox, here’s how to spot an imposter and how to respond.
1. Notice regarding a tax return you have not yet filed
Many scam letters go out early in the year while they know people are busy filing. If you get a letter for a current tax return you have not filed yet, it’s clearly a fake.
2. Missing IRS logo
The IRS always includes the IRS logo. If it’s text-only with no logo, it’s not an actual IRS letter.
3. Misspelling and grammatical errors
IRS letters always use proper spelling, capitalization, grammar, punctuation, and formatting.
4. Demand for immediate payment
Government letters requesting payment never say that you have to pay right away. Fake IRS letters often include high-pressure language demanding you pay immediately.
5. Anything involving gift cards or irregular payment methods
The IRS doesn’t want prepaid cards, iTunes gift cards, or anything other than good old-fashioned United States dollars. You should use a bank account, debit card, credit card, or check for payment.
6. Notice that you’ve won something
The IRS does not give out money. Its job is collections. There are no prizes or winnings to be had.
7. Threats of jail or prison time
The IRS won’t send threatening letters saying you will go to prison or jail if you don’t pay your taxes. While this is technically true, threats of prison time are not included in IRS mailings.
8. Request for payment to anyone other than the U.S. Treasury
Payments are only made on the official IRS channels, including the IRS website and authorized payment vendors. If you pay by check, it should be written to the U.S. Treasury. A request for payment in any other way is not legitimate.
9. Doesn’t arrive in an official government envelope
IRS mail comes in official government envelopes with the IRS logo. If you get a plain envelope or something suspicious-looking, it’s probably a fake IRS letter.
You can educate yourself on the latest pervasive tax scams with the annual Dirty Dozen report from the IRS.
How to report a fake IRS letter
If a fake IRS letter lands in your mailbox, you can take steps to fight back against the scammers by reporting the letter to the government. This helps them track patterns,hunt down the criminal, and offer better advice to protect others.
The official place to report fraudulent letters is the Treasury Inspector General for Tax Administration (TIGTA). You can also scan and email a copy directly to the IRS at phishing@irs.gov.
What to do if your IRS letter is real
If your IRS letter is real, don’t ignore it. Late and inaccurate taxes can lead to penalties, interest, and worse. When you believe the letter is accurate, you can follow the instructions in the notice to resolve the notice. If you disagree with the notice or think something is inaccurate, you have the right to appeal.
Small businesses with a trusted accountant, tax professional, or tax attorney should contact them for advice. You can work through discussions with the IRS on your own. Still, many businesses benefit from the help of a seasoned tax pro with the knowledge to help minimize any tax liabilities and penalties.
How Bench can help
The IRS doesn’t typically send out letters to taxpayers or businesses with a history of accurate, on-time tax filings. Problems arise when you have bookkeeping problems and make errors putting your tax return together. Bench can solve those two problems for you before they happen.
Bench offers specialized bookkeeping and tax services for small businesses, including historical bookkeeping to get your books updated the right way. Your Bench team knows where to look for deductions and credits you may have missed. Bench offers complete tax preparation and filing done for you for current and future years.
If you wind up with an IRS letter and need additional support, Bench clients have access to a network of partners to handle anything the IRS sends your way. Learn more about what tax filing looks like with Bench.
Don’t fall victim to a fake IRS letter
An IRS scam can target anyone. While most show up during tax season, it’s crucial to stay aware of potential fraudulent letters year-round. If you get something suspicious, it’s always best to contact the IRS directly using a publicly available phone number to confirm that it’s real.
To make sure your tax filings go smoothly from here on out, consider working with Bench for your bookkeeping, accounting, and tax needs. With a trusted bookkeeper on your team, you can stop worrying about the IRS and focus your attention where it should be—running a successful business.
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