Recently I was working at my desk and received an unexpected call. I picked up the phone and was immediately greeted by a brusque and forceful voice recording. “The IRS,” it says, “wants to take legal action against you.” It then urged me to call back and listed a phone number. My muscles tensed, my eyes widened. The jig is up… except… wait… there was no jig. I search my memory for whatever wrong I committed but came up blank. And then I remember a story I heard from a fellow accounting services provider. “I thought the IRS was trying to sue me,” he had said a few weeks back. “It turned out to just be a scam.”
We do not often think about how the IRS actually operates. Being aware of how this agency works and communicates with taxpayers will help you avoid being roped in by scammers. After I calmed down and took a reassuring sip of coffee, I turned to this blog post by Robert Kilkenny on how the IRS actually gets in touch with people, and how to handle it when they do. Here’s what I learned:
1. Don’t Panic
You see a letter in your mailbox from the IRS. It’s definitely not an invitation to a birthday party, but that doesn’t mean the news is bad. You might have a refund coming your way or the IRS might be simply requesting some information, or else letting you know that the processing of your return is delayed. So keep calm and resist the urge to sweep the letter away with the junk mail. You might have to take action on this notice if you owe more than you submitted, or if information is required, or if you need to verify your identity. Don’t delay. There might be a deadline for response.
2. Be Thorough
The IRS is a very thorough agency, so you should be thorough as well. Make sure you read the whole letter through to the end. If something doesn’t add up to you, contact them immediately to ask questions or to clarify. Make sure that when you call (the number should be listed on the letter) that you have your return and all related documents in hand. If you’ve been selected for an audit, refer again to rule one. Don’t panic. An audit doesn’t necessarily mean that the IRS suspects wrongdoing. A portion of audits are selected randomly. All the same, contact your accounting services provider or CPA firm immediately for guidance on how to prepare and what steps to take.
3. Ask Your Accountant
Your accounting services providers have worked with the IRS enough to know the ins and outs. So before you start wiring money over to whoever called on the telephone, call your accountant! This call could be a scam, but it could be something real that needs to be dealt with. Either way, your accountant can help you spot the difference and move forward in either scenario.