March 21, 2014

“The increasing number of people receiving these unsolicited calls from individuals who fraudulently claim to represent the IRS is alarming.” –  J. Russell George, Treasury inspector general for tax administration.

A new IRS phone scam is sweeping the country, and has so far stolen over $1 million from thousands of Americans.

Telephone Scams: A Common Theme

In February, the IRS released their “Dirty Dozen” tax scams for 2014 list, with phone scams at the forefront. These types of scams are common, and can creep up at any time of the year. But the dirty dozen definitely forecasted what’s now known as possibly the largest scams the IRS has ever seen.

“Taxpayers should be on the lookout for tax scams using the IRS name,” said IRS Commissioner John Koskinen. “These schemes jump every year at tax time. Scams can be sophisticated and take many different forms. We urge people to protect themselves and use caution when viewing e-mails, receiving telephone calls or getting advice on tax issues.”

Telephone tax scams usually follow the same pattern. The phone rings, and the victim answers to a supposed IRS agent or representative. They spout fake names and IRS badge numbers, then begin making demands riddled with threats. If you don’t pay up, or give them your bank account information or SSN, you’ll be arrested, or lose your business or driver’s license. When calling immigrants, as this most recent scam began, criminals often threaten their victims with deportation.

With a one-two punch they’ll follow up the initial call with another by someone pretending to be with the police or DMV, further supporting their claim.

Latest IRS Phone Scam : How is it different?

The IRS releases warnings; these scams aren’t new. How come people still fall for them? Better yet, how has this scam been so successful when it’s common knowledge to not give any personal information over the phone to anyone? The IRS itself says that they’ll never ask for credit card, bank account, or any other private information by phone. We, at Optima Tax Relief, have actually received several calls from upset clients after being contacted and threatened by scammers.

This scam has been so successful for a number of reasons, but mainly because it’s so believable. Scammers often:

  • Use official-looking caller IDs and toll-free numbers,
  • Use common names and surnames,
  • Can recite the last four digits of your Social Security Number,  and may know where you work,
  • May claim to know where you live, the color of your house, and what kind of car you drive,
  • Send follow-up official looking emails and notices, using the IRS logos and language,
  • Have accomplices, also with official-looking caller IDs from the government, further threatening you.

They’ll accuse the victim of tax dodging, and warn of jail time, property seizure, deportation and so on until they pay up. The preferred pay method is by prepaid debit card, as they aren’t connected to a traceable bank account.

And it’s working, says TIGTA officials. Each and every day, hundreds of more contacts are being made, and more money is being stolen.

If the IRS calls, don’t answer

Even legitimate contacts from the government can be daunting for taxpayers, and this scam is banking on that. Know that the IRS will never call you with threats and demands, or request bank or debit information over the phone. This is the most important safeguard you have against this scam, knowing that the IRS won’t contact you by phone. Real agents will contact you by mail first, especially if you actually have unpaid tax debt and are at risk of a federal tax lien.

If you do owe taxes, or believe you might,  and have been contacted by a phony IRS agent, call the IRS at  800-829-1040. A real agent can determine whether or not you really have a payment issue.

If you’ve been targeted by this or any scam, report the incident to the TIGTA at 800-366-4484. Also contact the Federal Trade Commission and use their “FTC Complaint Assistant” at FTC.gov. Be sure to specify”IRS Telephone Scam” in your complaint.

Photo Courtesy – Wikimedia