Despite all the warnings and news coverage, telephone scammers continue to run very successful "businesses" posing as Internal Revenue Service agents.
In May the U.S. Treasury Inspector General for Tax Administration announced the arrests of five people said to be involved in an IRS phone scam. The five individuals were arrested in Miami and charged with wire fraud and conspiracy to commit wire fraud. According to the court documents, the suspects pocketed almost $2 million in schemes that defrauded more than 1,500 victims.
Just a few weeks ago, dozens of arrests were made in another IRS phone scam that plagues American taxpayers. In this case, workers were arrested for their alleged roles in tax-related scams following a police raid on call centers outside of Mumbai, India.
The scam involved call center employees sending mass text messages announcing an urgent inquiry to as many as 10,000 American cellphone numbers, according to Parag Manere, deputy commissioner of police in Thane, in the western state of Maharashtra. If recipients called back, the call center employees would introduce themselves as "Christopher" or "Daniel" and speak with an American accent, impersonating IRS officers. They would then warn the victims that the local police or IRS agents would raid their homes within 30 minutes unless they sent an immediate payment, Thane police officials explained.
That call center was certainly getting a return on its investment. The local authorities believe the IRS scam was collecting some $90,000 to $150,000 a day and had been operating for a year.
So as crazy as all this sounds, people still fall prey to these IRS phone scams.
The bad guys apparently are still doing a great job targeting unsuspecting taxpayers. To that point, some 6,400 victims have collectively paid more than $36.5 million to scammers posing as IRS officials since October 2013, according to TIGTA. Over that same time period, TIGTA has received reports of roughly 1.2 million calls made to taxpayers demanding they send cash to resolve outstanding tax liabilities. The average amount of money lost in the scam is $5,700.
As part of the typical IRS impersonation scheme, the scammers make calls alleging to be from the IRS or the Treasury Department. Calls are often made using a technology called Voice Over Internet Protocol. It's a cheap and easy way to mask the origin of the calls and "trick" the person's caller ID to show up as the IRS or other agency. The scammers advise taxpayers that, due to adjustments made on their individual tax accounts, additional tax is owed to the IRS.
The scammers demand immediate payment over the phone by cash, wire or services, such as MoneyGram. In some variations of the scheme, the scammers ask for payment in iTunes gift cards.
"These telephone scams are being seen in every part of the country, and we urge people not to be deceived by these threatening phone calls," IRS Commissioner John Koskinen said, adding, "We have formal processes in place for people with tax issues. The IRS respects taxpayer rights, and these angry, shake-down calls are not how we do business."
While it may seem obvious, here goes: Never, ever give out personal financial information — such as Social Security numbers or credit card and bank account numbers and passwords — to anyone who calls you claiming to be from the IRS.
To that point, the IRS reminds taxpayers that they can know quite easily when a supposed IRS caller is a fake. Here are five things the scammers often do but the IRS will never do. Any one of these five things is a telltale sign of a scam. The IRS will never:
- Call to demand immediate payment, nor will it call about taxes owed without first having mailed you a bill.
- Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
- Require you to use a specific payment method for your taxes, such as a prepaid debit card.
- Ask for credit- or debit-card numbers over the phone.
- Threaten to bring in local police or other law-enforcement groups to have you arrested for not paying.
For more information on reporting tax scams, go to IRS.gov and type "scam" in the search box.