A client called me yesterday in a panic. She had received “…this in the mail. It says the IRS was going to levy me because I owe over $8,000.” I asked her to bring the letter into me. I wasn’t too concerned since she and her husband live on Social Security and I knew they couldn’t owe that much. It’s probably for a son with the same name as his dad.
It turns out that it wasn’t a letter from the IRS but a promotional postcard from a company wanting to sell her audit protection.
On first look, I could see where someone could be confused. The top right corner of the card looks like the top right corner of an IRS letter with a Notice number, tax year and a contract phone number. It’s not until you look at the very fine print that it becomes clear that they’re trying to sell something. In the middle of the second paragraph of fine print, they cover themselves.
This is not an official Department of the Treasury audit notification and is not intended to suggest that you are currently under notice of audit by the Department of the Treasury.
This company wants to sell taxpayers audit insurance. In the fine print, the card says that “one in twelve United States residents will be audited this year by the Department of the Treasury”. (Actually the figure is 1% (one in a hundred.)) They offer 4 plans that range in price from $4.95 to $49.95 a month that are supposed to help if you get audited. The higher the price the more features of the plan. Only two features actually concern audits and they don’t cover you financially but the company will work with the IRS on your behalf. The rest of the features of the lower priced plans give you access to tax info. Once you get to the higher priced plans, you will get identity theft protection and computer security protection. Please explain what they have to do with an IRS audit.
I’ve talked about phishing several times and this promotion has the stench of a phishing scheme. We all know that the IRS doesn’t initiate contact by email but I’ve never heard of them sending any notice by postcard. Audit info on a postcard is not confidential. The IRS sends everything in multi-page letters. Also, any taxpayer who needs help with an audit should start with the tax pro what prepared the return or the tax software company they used. Even if they prepared their own tax return, the taxpayer can hire an Enrolled Agent, CPA or other preparer to help them correspond with the IRS. This company is just using scare techniques to convince taxpayers to buy overpriced “protection” plans.
While this company is not in the same scummy league as Mo’ Money, Instant Tax Service or Rashia Wilson and Maurice Larry, they make me nervous. They use the public’s fear of the IRS to sell insurance that most taxpayers will never need.