Scammers are calling all kinds of people and business owners claiming to be from the IRS. This has been a popular and from all indications a very profitable swindle because it appears to be getting worse.
There was a time when it was targeted mainly to individuals; however, lately it appears they are including businesses and especially companies that tend to have many cash transactions.
It is no secret that contractors are in an industry with a lot of cash transactions and sometimes they get busy and forget to deposit the money in the bank and properly account for it inside their contractors bookkeeping services system.
From our experience as construction accountants, any contractor who cheats on their taxes ends up cheating themselves in the end. Their financial statements paint a picture of an incompetent fool, owning and operating a construction company and nothing could be further from the truth. They pay exorbitant interest rates for loans and lines of credit, which reduces their take home pay.
For the reasons outlined above some construction company owners have a nagging concern about when they will be found out and be faced with major fines, penalties and possible bankruptcy and in a few cases prison sentences. These fears go a long way to helping the scammers achieve their goal.
Step #01 - They rig a caller ID to make it appear as if the IRS is calling your contracting company.
Step #02 - Someone calls posing as IRS official claiming to be from the Treasury Inspector General for Tax Administration (TIGTA) and mentioning some obscure IRS codes, and says your construction company owes taxes and the owner had better pay up within a short time, usually a few hours or a few days.
Step #03 - The caller insists payment be made with a money loaded on a prepaid debit card, sent through a wire transfer, or paid by credit card.
Step #04 - If whomever answers the phone simply takes a message or refuses to comply the caller will likely call back try again several times.
In many cases, they have threatened to arrest or deport people, revoke a business license, freeze your bank accounts, seize your personal and construction company assets or even shut down your entire contracting company.
If you suspect you have been a target of this particular scam here are some actions you can take:
Report the incident to TIGTA online http://www.treasury.gov/tigta/contact_report_scam.shtml or call them at 1-800-366-4484.
File a formal complaint with the Federal Trade Commission at ftc.gov/complaint.
If it’s an email, forward it to the IRS at phishing@irs.gov. Don’t open any attachments or click on any links in those emails.
If you owe money to the IRS or if you think you owe money to the IRS, call the IRS at 800-829-1040 or go to irs.gov. You may be pleasantly surprised how friendly and workable the IRS staff is and in most cases, if you are honest and upfront with them they can help you with your payment questions.
As construction accountants, we have first-hand experience with situations where a construction contractor has been less than honest and in some cases, they have been extremely honest, but unaware of tax liabilities.
In most cases every tax agency, local, city, county, state, Federal and even the IRS have been most gracious and will do everything they can to work with people and especially contractors.
They are people just like you and I and most of them want to do the right thing and help you get on the "Straight and Narrow". Because they know, as do you, that it is better to collect some money in back taxes and have a contractor producing more work and paying more taxes in the future than it is too take everything you have and make you a burden on society.
To those readers who feel the government is not managing your tax dollars wisely, be not concerned, as The Great Teacher Said "Render to Caesar the things that are Caesar's...".
I strongly suggest you do your part, pay your taxes, no more than you owe, and more important no less than you owe. For goodness sake and your own sake, stay out of the way. In due time they will be called to account for their stewardship of the funds we taxpayers provided them, and it is much better for you and I not to get in the middle of that discussion!
As for the scammers, I strongly suggest if you lost money, file the reports and move on with you contracting company in the knowledge the Universe in always in balance and new fresh opportunities will be given to you that will more than make up for any losses. Let the Universe deal with them, without you getting in the middle of that either!
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About The Author:
Our Co-Founder Randal DeHart - Is a Certified PMP (Project Management Professional) with several years of construction project management experience. His expertise is construction accounting systems engineering and process development. His exhaustive study of several leading experts including the work of Dr. W. Edward Deming, Michael Gerber, Walter A. Shewhart, James Lewis and dozens of others was the foundation upon which our Construction Bookkeeping System is based and continues to evolve and improve. Check out our Contractor Success Map Podcast on iTunes and Follow Randal on Google+