Don't Fall for the Bogus Student Tax Scam

Gina Deveney
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Internal Revenue Service coattails often provide criminals with doors into the accounts and wallets of unsuspecting citizens. The latest tax scam accounting professionals should warn clients about targets students, but shysters masquerading as IRS or state agents plague people of all ages and backgrounds with shady phone calls and emails on a regular basis. Understand how to identify potential scams can help your clients protect themselves from these criminals.

The student tax scam warning comes directly from the IRS, which issued a statement about the issue in late May 2016. The IRS called the scam a "new twist" because the criminals specifically target college students with tax collections calls that state they must pay a new student tax. As with many tax-related scams, criminals threaten negative action against those who don't pay, going so far as to threaten students with calls to the police. The IRS commissioner asks tax payers to remain vigilant against aggressive calls from people claiming to work for state or federal agencies.

Accounting professionals can help reduce the number of people who fall prey to such tax scams by educating clients about known scams and assuring clients that tax accounts are current. This student tax scam isn't the only issue Americans face from criminals hiding behind IRS masks. Other reported scams include phone calls that demand that individuals pay taxes on iTunes gift cards or verify information regarding a tax return via phone. Ultimately, scammers seek to get someone to pay them immediately through an untraceable method or gain personal financial information for identify theft.

The IRS notes that its agents never make demands for immediate payments by debit or credit card over the phone. In fact, the IRS won't even call someone if they haven't already mailed a statement or bill regarding the matter. While there are consequences for owing taxes, the IRS doesn't threaten a police presence the first time it speaks to someone. Tax professionals can usually assure clients that law enforcement isn't going to get involved with a tax bill matter — criminal charges are usually reserved for those who purposefully evade taxes.

Another sign of a tax scam is a demand for payment without the option to dispute the amount in question. The IRS offers a lengthy appeals process for most tax collections matters. Even if a student — or anyone else — did owe additional taxes for legitimate reasons, they would have a chance to appeal the decision.

For a tax professional, it might be easy to spot tax scams. However, when faced with threats invoked in the name of the IRS, those who aren't experts in tax law often buckle under the pressure. When working with clients, accountants should make sure they understand how the IRS conducts business and urge them to call first before making additional payments on any tax matter.

Photo courtesy of Stuart Miles at


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