Sophisticated phone scams preying on taxpayers' IRS fears

Taxpayers need to be aware of new and more sophisticated scams targeted at people's fears associated with the IRS. These scams, designed to make the taxpayer think they are dealing directly with the IRS, are becoming more common.

Most recently, the Treasury Inspector General for Tax Administration (TIGTA) put out a news release describing the "largest ever" telemarketing scam targeting taxpayers, which is detailed below. And, as we were preparing this article for publication, the IRS began alerting taxpayers to a new telephone scam targeted at senior citizens that asks them to punch a button to learn more about a $3,000 credit item.

Things to Note

A few facts not mentioned in the TIGTA news release:

• The taxpayers receiving these fraudulent calls were targeted, meaning that the callers had enough information to make the taxpayer think they were talking with the IRS.
• The caller ID information was designed to look like the IRS.
• The callers demanded tax be paid over the phone via a prepaid debit card or direct bank transfer. If someone resisted payment, they were threatened with a variety of scare tactics, including deportation and loss of a driver's license.

Keep in mind as you read the TIGTA news item below that the IRS has administrative steps that are required to be cleared when collecting taxes, and it typically will not include a telephone call or e-mail as the initial contact; there is a lot of paperwork that comes first. While it may be difficult at the time, do not respond to these intimidation-style calls or e-mails, and notify the IRS if you receive one.

News Release: TIGTA Warns of "Largest Ever" Phone Fraud Scam Targeting Taxpayers

The Treasury Inspector General for Taxpayer Administration issued a warning to taxpayers to beware of phone calls from individuals claiming to represent the Internal Revenue Service in an effort to defraud them.

"This is the largest scam of its kind that we have ever seen," said J. Russell George, the Treasury Inspector General for Tax Administration. George noted that TIGTA has received reports of more than 20,000 contacts and has become aware of thousands of victims who have collectively paid more than $1 million as a result of the scam. The scammers make unsolicited calls to taxpayers fraudulently claiming to be IRS officials.

"The increasing number of people receiving these unsolicited calls from individuals who fraudulently claim to represent the IRS is alarming," he said. "At all times, and particularly during the tax filing season, we want to make sure that innocent taxpayers are alert to this scam so they are not harmed by these criminals," George said. "Do not become a victim."

The callers who commit this fraud often:

• Use common names and fake IRS badge numbers.
• Know the last four digits of the victim's Social Security Number.
• Make caller ID information appear as if the IRS is calling.
• Send bogus IRS e-mails to support their scam.
• Call a second time claiming to be the police or department of motor vehicles, and the caller ID again supports their claim.