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Electronic Federal Tax Payment System (EFTPS) Scam

Five Digital Marketing Trends to Get More Customers by Anne Dalgaard

For many years fraudsters have been trying to take advantage of taxpayers’ fear of the Internal Revenue Service (IRS) to scam information and money out of them. In the latest phone scam reported by the IRS, the fraud is being tied to the use of the EFTPS (Electronic Federal Tax Payment) system.

Many taxpayers use the EFTPS system to make various tax payments including payroll taxes, 1040 estimated payments or payment plan payments which makes this latest scam all the more worrisome. In this scam, the fraudster contacts a taxpayer claiming to be an IRS agent and indicating that there have been multiple certified letters sent to the taxpayer, all of which have been returned to the IRS. The fraudster then threatens the taxpayer with arrest unless a payment is made immediately using a prepaid debit card. The fraudster also tells the taxpayer that the card is linked directly to the EFTPS system, which is not true – in reality the fraudster retains control of the card. Lastly, the fraudster instructs the taxpayer not to contact their tax preparer, an attorney or their local IRS office until after the payment is made.

This type of fraud scam, while a new twist on an old concept, can be more dangerous than many of the other scams. The EFTPS system is widely used by small businesses to remit payroll taxes in the normal course of business, so the story comes across as more believable than when a fraudster calls a taxpayer to say there is a balance due to the IRS, when a liability is known not to exist.

Please remember, the IRS will NEVER call a taxpayer directly to discuss problems with their tax payments, they will NEVER insist on immediate online payment, and they will NEVER call and ask for personal identifying information or bank information over the phone. The IRS will send multiple letters regarding a tax matter before taking any additional steps to contact a taxpayer. Upon receipt of correspondence, a taxpayer should enlist the services of an accountant or attorney to represent them using Form 2848 Power of Attorney, if they do not feel comfortable working directly with the IRS.