The Scamsters Haven’t Stopped

One of my clients called me first thing this morning (we’ll call him Joe from Richmond, Virginia; all names and cities have been changed to protect the innocent and guilty). Joe said he got a phone call from David. David identified himself as working for the IRS in Seattle. David accused Joe of not paying his taxes from 2008 – 2011; that Joe had not responded to a threat of a lawsuit that was mailed to him in December 2013; that unless Joe acted that lawsuit would be filed by the IRS. David told Joe Joe’s address and the first five digits of Joe’s social security number to “verify” his story.

Joe hung up the phone on David.

The phone call Joe received was almost certainly a variation of this scam:

TIGTA Warns of “Largest Ever” Phone Fraud Scam Targeting Taxpayers

WASHINGTON — The Treasury Inspector General for Taxpayer Administration (TIGTA) today issued a warning to taxpayers to beware of phone calls from individuals claiming to represent the Internal Revenue Service (IRS) 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 over 20,000 contacts and has become aware of thousands of victims who have collectively paid over $1 million as a result of the scam, in which individuals 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, adding, “Do not become a victim.”

Inspector General George urged taxpayers to heed warnings about the sophisticated phone scam targeting taxpayers, noting that the scam has hit taxpayers in nearly every State in the country. Callers claiming to be from the IRS tell intended victims they owe taxes and must pay using a pre-paid debit card or wire transfer. The scammers threaten those who refuse to pay with arrest, deportation or loss of a business or driver’s license.

The truth is the IRS usually first contacts people by mail – not by phone – about unpaid taxes. And the IRS won’t ask for payment using a pre-paid debit card or wire transfer. The IRS also won’t ask for a credit card number over the phone.

“If someone unexpectedly calls claiming to be from the IRS and uses threatening language if you don’t pay immediately, that is a sign that it really isn’t the IRS calling,” he said.

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.

If you get a call from someone claiming to be with the IRS asking for a payment, here’s what to do:

  • If you owe Federal taxes, or think you might owe taxes, hang up and call the IRS at 800-829-1040. IRS workers can help you with your payment questions.
  • If you don’t owe taxes, call and report the incident to TIGTA at 800-366-4484.
  • You can also file a complaint with the Federal Trade Commission at www.FTC.gov. Add “IRS Telephone Scam” to the comments in your complaint.

TIGTA and the IRS encourage taxpayers to be alert for phone and e-mail scams that use the IRS name. The IRS will never request personal or financial information by e-mail, texting or any social media. You should forward scam e-mails to phishing@irs.gov. Don’t open any attachments or click on any links in those e-mails.

Taxpayers should be aware that there are other unrelated scams (such as a lottery sweepstakes winner) and solicitations (such as debt relief) that fraudulently claim to be from the IRS.

Given that Joe has paid his taxes without fail every year, that the IRS would send multiple notices about unpaid taxes, and the fact that the IRS doesn’t file lawsuits (the US Department of Justice acts as the legal arm for the IRS when the IRS initiates legal action), the chance that David was telling the truth is about the same as it snowing in Las Vegas in August.

Joe did the right things. He reported this to TIGTA (see above on how to do that), and he has saved (for now) the follow-up phone message where David whined at Joe for hanging up the phone on him and that action “wasn’t professional.” Joe also sent in an Identity Theft Affidavit to the IRS because it appears others do have his confidential personal information. (He’ll also be adding fraud alerts to his credit reports.)

Almost always, the IRS initiates contact through the US mail. If you owe significant money, IRS Collections will sometimes knock on your door and leave a business card. If you file an appeal with the IRS, that conversation may come by phone (but you would first get a letter from IRS Appeals).

If you get a phone call like Joe did, it probably is a scam. If you owe taxes, call the IRS back (800-829-1040); they can tell you if your account has been assigned to collections and whom to contact. If you don’t owe the IRS money, call TIGTA.

I’m hopeful that David and his ilk see the inside of ClubFed for a long, long time.

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