Telephone Tax Scam Continues to Rear Its Ugly Head

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A nationwide phone scam that US tax authorities have warned citizens about since the end of last year shows no sign of stopping.

The IRS and the Treasury Inspector General for Tax Administration (TIGTA) said on Wednesday that they are continuing to hear from taxpayers who have received calls from individuals participating in the sophisticated phone scam, in which the fraudsters claim to be from the IRS and demand money.

To date, based on the 90,000 complaints that TIGTA  has received through its telephone hotline, the Treasury inspector general’s office determined that 1,100 victims have lost an estimated $5 million due to the phone scam.

“There are clear warning signs about these scams, which continue at high levels throughout the nation,” IRS Commissioner John Koskinen said in a written statement on Wednesday. “Taxpayers should remember their first contact with the IRS will not be a call from out of the blue, but through official correspondence sent through the mail.”

The phone scam, in which taxpayers are told they owe money to the IRS and are threatened with arrest or deportation if they don’t pay up, has occurred in nearly every state in the country.

Victims are told by scammers who are impersonating IRS agents that they must pay the IRS promptly through a preloaded debit card or wire transfer. If they refuse to cooperate, the scammers often become hostile and insulting, threatening to send victims to prison, to deport them, or to suspend their business or driver’s license.

“A big red flag for these scams are angry, threatening calls from people who say they are from the IRS and urging immediate payment. This is not how we operate. People should hang up and contact TIGTA or the IRS,” Koskinen added.

Stories from people, like Connecticut resident Jackie Wolak, who have been on the receiving end of phone calls from fraudsters have sprung up throughout the country in the past year. Wolak, a senior citizen, told the Record-Journal newspaper in Meriden, Connecticut, that she received a phone call earlier this week from a man claiming to be from the IRS. He provided a badge number and told Wolak she owed the agency nearly $1,500.

According to Wolak, the man warned that if she didn’t send a money order immediately, the police would be at her door in minutes.

She then called her accountant to see if she owed money to the IRS. She did not. Wolak then contacted her local police department and was told that other residents in the area had received similar calls.

Wolak told the newspaper that the man who called provided a phone number and address in Washington, DC, but only recited a four-digit ZIP code. The man hung up when she asked why the ZIP code wasn’t longer.

“When they start with a badge number, people feel intimidated,” she told the newspaper.

How to Prevent Being Victimized
The IRS emphasized on Wednesday that taxpayers should know the following:

  • The IRS never asks for credit card, debit card, or prepaid card information over the phone.
  • The agency never insists that taxpayers use a specific payment method to pay tax obligations.
  • The IRS never requests immediate payment over the phone and will not take enforcement action immediately following a phone conversation. Taxpayers usually receive prior notification of IRS enforcement action involving IRS tax liens or levies.

Potential phone scam victims may be told that they owe money that must be paid immediately to the IRS or they are entitled to big refunds. When unsuccessful the first time, sometimes the fraudsters call back trying a new strategy, the IRS noted.

Other characteristics of these scams include the following:

  • Scammers use fake names and IRS badge numbers. They generally use common names and surnames to identify themselves. In Wolak’s case, the man who called her said his name was “Robert Hill.”
  • Scammers may be able to recite the last four digits of a victim’s Social Security number.
  • Scammers spoof the IRS toll-free number on caller ID to make it appear that the IRS is calling.
  • Scammers sometimes send fake IRS emails to some victims to support their bogus calls.
  • Victims hear background noise of other calls being conducted to mimic a call site.
  • After threatening victims with jail time or driver’s license revocation, scammers hang up and others soon call back pretending to be from the local police or DMV, and the caller ID supports their claim.

The agency reiterated that it doesn't initiate contact with taxpayers via e-mail to request personal or financial information. “This includes any type of electronic communication, such as text messages and social media channels,” the IRS stated. “The IRS also does not ask for PINs, passwords, or similar confidential access information for credit card, bank, or other financial accounts. Recipients should not open any attachments or click on any links contained in the message. Instead, forward the e-mail to phishing@irs.gov.”

Related articles:

New Major IRS Phone Scam Highlights Dangers
IRS Warns Taxpayers of Phone Scam

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but why IRS not doing something to stop the crime?

It's the telephone companies that should be held responsible for these phone scams. These scammers are using their service to call and scam people. What's worse, I read from http://www.callercenter.com/ar... that some telephone companies actually provide the tool to facilitate caller ID spoofing. What was "faking the phone number" for? The way I see it, it's to trick people into thinking that the caller is another person or some big legit company.

While the IRS keeps saying officially they do not make initial contacts with taxpayers over the phone, its field agents are doing exactly that. A client received a call from a revenue agent on an upcoming audit even though I have a duly executed POA, Form 2848, on file for the year. A former revenue agent told me calling the taxpayer is routine, supposedly to make sure the address on file is correct. And how did the IRS get the taxpayer's unlisted cell phone number?