Tax season is now in full swing. Of course, that also means it is time for an increase in scams. Historically, there have been a number of IRS-related scams with new twists surfacing all the time. And they don't always necessarily occur around tax time, but pop up in different forms throughout the year.
During 2014 and 2015 the U.S. Internal Revenue Service (IRS) sent out numerous warnings to taxpayers alerting them to the fact a major scam was circulating in the form of threatening telephone calls.
Many scammers design schemes pretending to be official representatives of the U.S. Internal Revenue Service - this is a scam that continues to target unsuspecting taxpayers in the United States.
( Image: IRS building/sign located in Washington D.C. )
What is the IRS Phone Scam About?
What is happening is U.S. taxpayers are receiving unsolicited phone calls from people claiming they are IRS agents. These schemers, who often do a good job presenting themselves as official IRS tax agents, demand money from the recipient of the call telling people they owe money that must be paid immediately. If not paid, victims are being threatened they will receive jail time, have their driver's license revoked or be deported. Others victims are told they are entitled to a large refund.
The fraudsters do falsify information and typically even give the recipient of the call a fake name and badge number. Some scammers will even know their potential victim's last 4 digits of a Social Security number or other personal information which may lead people to believe the call is authentic.
Many receive initial contact via a robocall with instructions to call back - these scammers emphasize the "urgency" of taxpayers having to call back ASAP.
If you receive a demanding call, either from a person or a robocall, immediately hang up. The U.S. Internal Revenue Service says it does not do business this way.
Impact of the Scam
Tens of thousands of people have reported receiving this fraudulent phone call. Chances are with tax time here, these numbers will see an uptick again. In Feb. 2015 this scam topped the IRS' "Dirty Dozen" IRS-related scams; in the newly released update for 2016, this scam is still in the top two.
"Taxpayers across the nation face a deluge of these aggressive phone scams. Don't be fooled by callers pretending to be from the IRS in an attempt to steal your money," said IRS Commissioner John Koskinen in the Feb. 19, 2016 news release. “We continue to say if you are surprised to be hearing from us, then you're not hearing from us.” 3
As of August 2014, the Treasury Inspector General for Tax Administration has determined about 1,100 people lost approximately $5 million from this scam. Fast-forward to February 2016 and the IRS is aware of at least 5,000 victims - collectively they have paid over $26.5 million as a result of the scam.
"There are many variations. The caller may threaten you with arrest or court action to trick you into making a payment,” Koskinen adds. “Some schemes may say you're entitled to a huge refund. These all add up to trouble. Some simple tips can help protect you."
What to Do if You Receive a Fraudulent IRS Call
If this year is like previous years many people in the upcoming months will be receiving phone calls from people purporting to be Internal Revenue Service representatives. If you receive any calls from anyone claiming to be an IRS representative you should know:
- IRS representatives do not call out of the blue
- No one from the IRS will ever ask for payment over the phone
- The scammers often sound very convincing
- Scammers can spoof a phone number to make it look on Caller ID they are an IRS agent
- In addition to phone calls, IRS scammers often attempt to defraud by email
- If the IRS wants more money, you will receive a USPS-delivered letter before getting a call
- The IRS has an appeal process giving taxpayers the chance to question their tax bill
- If the person calling sounds angry or gives threats, it is a scam
- If the person threatens to involve law enforcement, it's not a legit call
- The IRS will never ask for credit, debit or any other information via the phone
- Do not confirm or give out any personal information
Taxpayers will receive official mail from the IRS if there is a tax issue. It will never come in email or an unexpected phone call. If they call you it will be after having previously made contact with you.
( Image: IRS building located in Washington D.C. )
If you suspect you have been targeted by one of these scams, hang up immediately and call the Treasury Inspector General for Tax Administration (TIGTA) at 1-800-366-4484 to report the incident (or visit their web page dedicated to scam reports at https://www.treasury.gov/tigta/contact_report_scam.shtml).
Also, you can report the incident to the Federal Trade Commission at FTC.gov. Be sure and note "IRS Telephone Scam" to your complaint so it can be correctly addressed.
If you do think you owe taxes, you can call the IRS to ask them about your situation - don't give any information to any caller soliciting information. You can reach the IRS at 800-829-1040.
Have you ever received a call from a scammer pretending to be an IRS agent? If so, please share your experience in the comments below.
Here's a video where a scammer fesses up how his particular scam works after he tried to scam a police officer [scammers use bad language which was edited out before being posted to YouTube].
Video of a woman who decides to play along with one of these scammers which demonstrates some of the tactics used. There are many other different examples on YouTube in what people experienced.