Callers posing as agents from the Internal Revenue Service (IRS) attempting to collect bogus tax debts topped the list of the most reported scams of 2016, according to the Better Business Bureau. Those IRS phone scams accounted for 1 in 4 reported scams last year.
As part of the scam, callers dialed up potential victims while impersonating agents from the IRS or U.S. Citizenship and Immigration Services (USCIS). Calls were typically made using VoIP (voice over internet protocol) technology that allowed the scammers to “spoof” the phone numbers, making it appear that the calls were coming from the IRS or other government agency. After convincing numerous taxpayers that they needed to pay up or face punishment, thieves were able to make off with millions of dollars in stolen money. The U.S. Treasury Inspector General for Tax Administration J. Russell George reported that his agency alone had received over 2 million contacts from individuals who received these kinds of solicitations and approximately 10,000 people acknowledged that they were victims. The largest single amount paid as a result of the IRS impersonation scam as charged in the indictment is $136,000, paid by a victim in California.
The scam, which started making the rounds in 2013, topped the list in 2016, just as it did in 2015. However, there is some good news: according to the Better Business Bureau’s Scam Tracker, the numbers of IRS-related scam complaints have dropped dramatically since mid-December. That may be because of dozens of arrests made in late October as part of a multi-year, multi-agency investigation into the IRS-impersonation scams.
The nine kinds of scams that round out the top ten in 2016 – after those IRS-impersonation scams – were:
2. Debt Collections
3. Sweepstakes/Prizes/Gifts
4. Online Purchase
5. Employment
6. Government Grant
7. Tech Support
8. Advance Fee Loan
9. Fake Check/Money Order
10. Phishing
The government grant scam noted in the list sometimes has a tax component as well. According to a recent complaint filed with the Better Business Bureau, it works as follows: the consumer receives a notification that they have been awarded a government grant. To collect, the scammer advises that they need certain personal information from the consumer, which may include Social Security numbers and birth dates. In addition, to claim the money, the consumer is told they must pay a filing fee. After the scammers receive the fee, they demand more money from the consumer, insisting that the IRS has stopped the transfer of grant money because tax is due.
The federal government advises caution when responding to grant notifications. You should be aware that the government does not contact individuals to award grants for which there has been no application and the government does not charge a fee for applying for a federal grant. Additionally, federal grants are usually awarded for specific programs, research or projects, most often to local governments, organizations, institutions, and universities, and not to individuals.
With all of the scams out there, how can you protect yourself? The Better Business Bureau offers the following ten tips:
1. Never send money to someone you have never met face-to-face.
2. Don’t click on links or open attachments in unsolicited email.
3. Don’t believe everything you see.
4. Don’t buy online unless the transaction is secure.
5. Be extremely cautious when dealing with anyone you’ve met online.
6. Never share personally identifiable information with someone who has contacted you unsolicited, whether it’s over the phone, by email, on social media, even at your front door.
7. Don’t be pressured to act immediately.
8. Use secure, traceable transactions when making payments for goods, services, taxes, and debts.
9. Whenever possible, work with local businesses that have proper identification, licensing, and insurance, especially contractors who will be coming into your home or anyone dealing with your money or sensitive information.
10. Be cautious about what you share on social media and consider only connecting with people you already know.
For more details and information on avoiding scams, visit www.bbb.org/avoidscams.
For tips to avoid identity theft-related fraud, including tax refund related fraud, click here.
