What is an IRS Scam Call?

An IRS scam call is a phone call that Americans receive from an individual claiming to work for the Internal Revenue Service (IRS). This person tells you that you owe money from past tax returns that you filed incorrectly, and if you don’t pay up they will send you to jail immediately. These calls can be very stressful and scary to some people who believe that these calls are real. The scammers who call can sound very official and aggressive, and are designed to put you in panic mode so you don’t think clearly and just do what they say. These scammers have put a lot of work into their scam and have the potential to make very good money off of hard-working people who think the calls are legitimate.

As a side note, although this article focuses specifically on the IRS, these scam callers target other countries as well. Canada seems to be popular on their list, as scam callers claiming to be from the Canada Revenue Agency (CRA) will try the same tactics.

Filing Taxes

Here are the signs to look for when accepting a call from someone claiming to be from the IRS and demanding you owe money.  The scammers work from a script and never deviate from it.  They may use all of these tactics in the same phone call or pick and choose, depending on how the call is going.

  1. The phone number is from a different area code than yours. This is the first red flag you should look for. The IRS headquarters are located in Washington, DC, but every state has a local IRS agency as well.  Although lately the scammers are getting more sophisticated and able to ‘spoof’ local numbers, it is a good practice to not answer phone calls from numbers you don’t know. If it’s important enough, they will leave a voicemail.
  2. Speaking of voicemail! Most of the time they don’t leave a voicemail, but if they do it is usually a robotic voice. The robotic voice will say that something to the effect that a lawsuit has been filed against you, or that a warrant has been issued for your arrest. Sometimes they will mention a ‘case file’ for you to reference when calling back.
  3. They are almost always Indian or Pakistani.  It’s unfortunate, but most of these calls are coming from call centers located in India and Pakistan. This is one of the reasons it is very difficult to stop these calls, because they are not in America, so there is little the government can do to prosecute these people. The call centers hire locals and train them as if it is a typical call center job. In fact, if you have a conversation with the caller you can hear a call center environment in the background.  The names they use are common American names (think John Smith or Sally Jones), and they will give you a badge ID number to make it sound more official.
  4. They almost always answer the phone as the Criminal Investigation Department of the IRS. Or some other scary sounding department, such as Fraud Department.
  5. They ask you if you intentionally decided to defraud the government or if it was an honest mistake. This is one of the more amusing tactics they use. What difference should it make if your tax mistakes were intentional or if you did it on purpose? Still not sure why this is used, my only guess is that they might change the dollar amount owed based on your answer.
  6. They tell you that you have 45 minutes to pay or the police will show up at your door to arrest you. They usually have a long monologue about how the local police department and the Attorney General have issued a warrant for your arrest and will come to your house to arrest you if you hang up the phone.
  7. The money that you owe is almost always over the span of several years, and it’s never a round number. For example, they will say that you owe $3,467.19 from the years 2011-2015. They never allow you to question exactly why the tax returns from that year are incorrect and how they got to that dollar amount. They usually get angry when you decide to question them. If the real IRS decides to audit you, they will ask for very specific detailed information from specific years and returns. You should never feel afraid to question anyone who is trying to extort money from you!
  8. You are only able to pay in gift cards. So their hope is that you will go out and buy gift cards as payment for your debt. Once you buy the cards, you are supposed to scratch off the strip that has the gift card number and give it to the scammer. The scammer then has control of the gift cards to spend how they choose.
  9. THE IRS WILL NEVER ASK FOR PAYMENT IN THE FORM OF GIFT CARDS. If you take nothing else away from this article, know that this will never happen. If a caller asks you to pay in any kind of gift cards, it is absolutely 100% a scam.
  10. They will give you a spiel and tell you that you cannot interrupt with questions until they are done speaking. God forbid you have a question of someone who is trying to take money from you. They would rather you sit silently and take what they say as the truth.

Bonus Bogus Signs to Look For:

  • They will tell you that you are on a three way call with other government agencies, such as the Department of Homeland Security, The Treasury Department, your local police department, or some other official sounding department designed to cause you anxiety and stress and put fear into your heart.  Isn’t it strange that these other agencies never reveal or identify themselves during the entire phone call?
  • Sometimes they seem to have personal information on you, and sometimes they don’t. They may or may not ask you for your phone number or last 4 digits of your social security number. Of course, never give them this information (you should never give sensitive information over the phone anyway, no matter who calls you). But even if you refuse to give them any information, they will try to continue to defraud you with vague information.
  • They ask you if you filed your tax return yourself or if you had a professional do it for you. Another strange question, but I think this is so they can weed out the people who want to immediately call their accountant or CPA and have them deal with the scammer.
Capitol Building in Washington, DC

What if the Real IRS Wants to Contact You?

They won't ask you for gift cards!

If you are going to be audited by the IRS, they will always contact you first by mail, never by phone. Of course, after the initial contact you may have phone conversations with them, but by then you are aware of why they are calling you. More than likely you will also have a contact name. There are processes and procedures that the IRS follows, so even if you end up owing money it will not be over the phone and did I mention...it will NEVER be with gift cards. The IRS prefers cold hard cash just like everyone else.