How to Spot a Fake IRS Letter

Taxpayer scams have claimed millions of dollars and have become so common that the IRS puts out a list of scams to watch for every year. Tax-related scams often work because they use threatening language to make you feel vulnerable, pushing you to act quickly. 

Scammers leverage the fact that most people fear the IRS. They send out fake letters, phishing emails, or phone calls that threaten to take action unless the taxpayer makes a payment immediately. Scam artists know that taxpayers aren't going to think clearly when they're panicked. 

But a little education can go a long way. When you know the warning signs of fake letters, you will easily be able to avoid scams. And you'll be able to identify and respond to real IRS letters much more confidently. 

Have you ever received a suspicious or threatening tax-related letter? Would you feel confident in your ability to spot a fake IRS letter? This article will show you which red flags to look for, as well as what to do if your IRS letter is genuine.

What Is a Fake IRS Letter?

A fake IRS letter is any mailed communication from a party who is wrongfully posing as the IRS in order to scam you out of money. These scammers employ a variety of different tactics to try and access both your personal identification details and bank accounts.

There are also ‘fake’ tax-related letters sent out by unscrupulous tax debt relief companies trying to market their services in relation to genuine tax issues you may be having. Let’s take a closer look at both of these common mailing scams.

IRS scam letters 

The most common kind of IRS scam letters are sent by scam artists trying to steal your identity and money. These scammers are most active during tax-filing season, but they also target folks all through the year. The letters they send can sometimes have an IRS letterhead, and some of them can look quite convincing. 

Here are some of the types of things scammers write in these letters: 

• Let us help you apply for a tax credit/tax refund.
• We’ve calculated your tax refund; please fill out this form.
• Your identity has been stolen; please buy these gift cards and follow our instructions.
• You need to call this number or else you’ll be arrested/fined/lose your Social Security number.

These scam letters are successful because they often contain strong, threatening language that urges recipients to act quickly. But this is a big red flag. In reality, the IRS will never threaten you with imprisonment, and they cannot cancel your Social Security number. These scammers will often use a hook, such as the promise of a tax credit, or the threat of jail time, to get you to call a number. 

You’ll then speak to a scammer posing as an IRS agent, using more threats and scare tactics to pressure you into giving over sensitive information. Remember that the IRS will never pressure you into handing over information, especially not under threat. 

Marketing letters from tax companies

Although less common and less threatening, some tax debt relief companies will send fake IRS letters as a marketing strategy. These letters generally claim to be from fake organizations such as the Tax Processing Unit, the Bureau of Tax Enforcement, or the Tax Resolution Unit, etc. None of these agencies are real.

The purpose of these letters is to pressure you into working with a tax relief company in order to address a tax debt. This is generally in reference to real tax debt. Because tax liens are on public record, tax companies can use that information to find you and market their services to you. 

These letters often push you to make a call in order to avoid your debt going to collections or so that you can get so-called one-time forgiveness. But instead of calling the IRS or state tax agency, you’ll just reach a salesperson at a tax debt relief company. They’ll do their best to convince you to sign up for their services.

While the company may be able to resolve your tax debt, they are almost certain to overcharge you at the same time. They may also cut corners that result in you continuing to see tax problems resurface down the line. That’s if you’re lucky, however - many of the worst tax relief companies will just take your money and run or charge you a high fee upfront and string you along with minimal service until you get fed up chasing them.

Genuine and trustworthy tax debt resolution companies won’t ever con you into contacting them via deceitful letters. They'll use honest and transparent marketing campaigns. 

How to Spot a Scam IRS Letter

While IRS scam letters can often look convincing, the good news is there are red flags you can look for to spot one. Here are some common characteristics of fake IRS letters.

1. Concerning a tax return you haven't filed yet.

A lot of scam letters will be sent early in the year when people are busy filing tax returns. However, if you receive a letter in relation to a tax return you have yet to file, you can be confident it’s a fake.

That said, if you receive a real IRS letter about a tax period where you haven't filed yet, someone may have stolen your identity. Thieves sometimes file fake returns to get refunds. If that happens, contact the IRS directly.

2. Letterhead details

Some scam letters don’t include an IRS masthead (logo), while a genuine one always will. A genuine letter always includes a notice number and your Social Security number in the top or bottom right corner. If these details are missing, you’ve most likely got a fake letter.

Incorrect grammar, misspellings, and odd formatting details are also common elements of fake IRS letters.

3. Pressure to pay immediately

Genuine IRS letters won’t make demands for immediate payment. For example, an intent to levy notice is one of the most severe IRS collection letters. It explains that if you don't pay in 30 days, the IRS will seize your assets, but it also tells you how to appeal the levy through a hearing.

Fake IRS letters almost always include threatening language intended to scare you into making a rash decision to give up payment or identity details. They say that you must pay immediately. They don't outline your rights to a hearing or let you know about payment plans or other resolution options. 

4. Irregular payment methods

If you receive an IRS letter requesting payment via prepaid cards, gift cards, or any other alternative payment method, it’s definitely a scam. The IRS will only ever want to be paid in US dollars via a bank account, debit card, credit card, or check. 

Also, all checks and money orders get made out to the U.S. Treasury. If someone is telling you to make out a check to another entity, they are a scam artist. 

5. Notice that you’ve won something

There are no prizes or winnings ever issued by the IRS. Any mail you receive to this effect is a scam. 

6. Threats of jail or prison time

The IRS will never send a letter to threaten you with arrest, prison, or jail time if you fail to pay your taxes. While you can conceivably end up in jail for tax-related crimes, it's very rare, and you won’t be threatened with that via mail. 

Likewise, they won’t ever threaten you with cancellation of your Social Security number. Any letters you receive with threats like this are fake.

7. Unofficial envelope

All genuine IRS mail will come in official government envelopes with the IRS logo on the front. If your letter comes in an envelope without that logo, or if it looks otherwise suspicious, it’s most likely a fake IRS letter. 

What Does a Real IRS Letter Look Like?

Now you know how to spot a fake IRS letter, you might be wondering: what does a real IRS letter look like?

There are a few details to look for when trying to determine the authenticity of your IRS letter. A legitimate IRS letter will usually be called a ‘notice’, and should contain an official notice number (CP) or letter number (LTR) in the top or bottom right of the page. There will always be an official IRS logo printed at the top of the letter.

Notices from the IRS will always refer to your rights as a taxpayer, as well as the steps you can take to proceed with or address your specific tax issues. Furthermore, you can also look for a truncated tax ID number or Social Security number, and a reference to the specific tax year to which the issue relates.

If you do receive genuine correspondence from the Internal Revenue Service, it’s a good idea to keep a copy of the letter on file until the issue has been resolved. For more information, you can refer to these directions from the IRS on steps to follow once you receive a letter from them. 

How to Report a Scam IRS Letter

It isn’t worth your time to respond to any fake IRS letter. Don’t call any numbers listed. Instead, you can report the letter directly to the IRS.

You can report any scam or fake IRS letter by emailing a photocopy to [email protected]. Reporting directly is the best way to assist the IRS in tracking down scam artists and helping others avoid falling victim. 

As well as sending mail, scammers will also target people via email, phone calls, texts, and even social media messages. In all cases, the best action is to refrain from engaging and report the interaction to the IRS.

Remember that the IRS contacts taxpayers exclusively through mail and occasionally over the phone. The agency won’t reach out to you in an email, text, or via social media. If you do receive a phone call from the IRS or a registered third-party collections agency, you’ll always have received a letter beforehand. 

What to Do If You Really Owe Money to the IRS

One of the things that can make it easy to fall for a fake IRS letter is when you are actually in the middle of a tax debt issue. Keep in mind that the IRS will always give you at least 30 days to respond to any notice they issue via mail, so there’s no need to panic.

If you are unsure about whether or not you owe the IRS, your first step is to check. If you think you might owe money to the IRS, you can check that directly on their website. Don’t let a fake letter scare you into action before you’re actually sure about your situation. 

If you are facing a genuine debt with the IRS, you should consider seeking professional help. At TaxCure you can find and assess certified local tax relief experts to help you resolve all manner of tax issues. 

Protect Yourself From Fake IRS Letter Scams

IRS scammers can target anyone, so it’s vital to be aware of the red flags. While these scam letters most often appear during tax return season, they can also show up year-round, so it’s important to stay vigilant. Always report any suspicious letters directly to the IRS, if possible. 

In addition to being aware of the red flags, the best defense you can have against fake IRS letters is to be fully aware of your own current tax standing.