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Consumer Alerts on Tax Scams

‪Note that the IRS will never:

Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. Generally, the IRS will first mail you a bill if you owe any taxes.

  • Threaten to immediately bring in local police or other law-enforcement groups to have you arrested for not paying.

  • Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.

  • Ask for credit or debit card numbers over the phone.

Delaying the Collection Process

If the IRS determines a taxpayer is unable to pay, it may delay collection until the taxpayer's financial condition improves, however, penalties and interest continue to accrue until the full amount is paid . Being currently not collectible does not mean the debt goes away, it means the IRS has determined you cannot afford to pay the debt at this time. You'll need to complete a Collection Information Statement and provide proof of your financial status (this may include information about your assets and your monthly income and expenses). You should know that if the collection process is delayed, your debt will increase because penalties and interest are charged until you pay the full amount.


Forming a business can be tricky. Sole Proprietors or Entrepreneurs often start businesses to increase their income. The IRS may or may not recognize your new venture as a "business practice" if your business lacks certain elements. In making the distinction between a hobby or business activity, take into account all facts and circumstances with respect to the activity. A hobby activity is done mainly for recreation or pleasure. No one factor alone is decisive. You must generally consider these factors in determining whether an activity is a business engaged in making a profit. IF your business continues to experience a loss each year, the IRS may consider it a "Hobby" and prevent you from claiming any expenses or business loss on your tax returns.

You may find more information on this topic in section 1.183-2 (b) of the Federal Tax Regulations.