I had just finished speaking at a conference one day last week when I received an urgent message from my office. One of my clients had called in a panic because “[s]he received a strange phone call from IRS…. she did not pay her taxes from 2008-2012 and that she is going to be arrested tomorrow morning.”
I excused myself and went outside to call her back. It was, I told her, a scam. By that time, she had calmed down and told me that she had figured it out. In that short span, however, she had been worried.
My client is hardly alone. The Treasury Inspector General for Taxpayer Administration (TIGTA) has issued a warning to taxpayers to be on alert for these fraudulent calls, calling it “the largest scam of its kind that we have ever seen.” J. Russell George, the Inspector General, says that TIGTA has received more than 20,000 reports of bogus contacts with taxpayers paying over more than $1 million to the scammers.
I first heard about this particular scam in early October 2013 when another one of my clients received a similar call. A week later, the scam heated up, aided by the shutdown: taxpayers couldn’t contact the IRS to determine whether the calls were legitimate. By the end of October, it was clear that the problem was escalating and the IRS issued an official warning and another in November 2013. In February of 2014, the scam was deemed one of the Dirty Dozen Scam for 2014.
The warnings and press have not stopped the calls. George reports that the calls are continuing, referring to the increase as “alarming.”
As part of the scam, callers posing as IRS representatives contact taxpayers by phone, claiming that they owe money to the IRS. Taxpayers are told that they must pay the balance promptly using a pre-loaded debit card or wire transfer or be subject to punishment, including arrest, deportation, or suspension of a business or driver’s license. Although the callers have heavy foreign accents, they use common names during the call, including “Kevin Peterson” and “Ronnie Miller.” They may also use fake badge numbers. It is not unusual for the caller to turn hostile during the call, and use threatening language. That, George says, should be a red flag that “it really isn’t the IRS calling.”
If you are concerned about the legitimacy of a call, contact the IRS at 1.800.829.1040 to verify whether the call is legitimate. However, it’s worth noting that the IRS doesn’t generally initiate contact by phone: your first contact with the IRS is usually by mail. Additionally, the IRS won’t ask for payment using a pre-paid debit card or wire transfer or ask for a credit card number over the phone (the IRS uses a third party processor for credit card payments via the web site).
If you happen to be on the receiving end of one of these calls, you can report the incident to TIGTA at 1.800.366.4484. Try to remember as many details about the call as possible for purposes of reporting the fraud.
If you think a call might be a scam, hang up. There’s no need to engage the caller and no need to give them additional opportunities to make you a victim. Don’t give away any personal information over the phone, including your financial information. And remember, be careful out there.
