The Scoop: Fake IRS Calls

If you get a call from someone claiming to represent the IRS and demanding immediate payment, you are being scammed. These phishing calls are on the rise with over $5 million stolen from innocent people so far. Keep reading to learn more about these scams, how to respond and how to protect yourself.

The Call

Because most of us are intimidated by the thought of being in trouble with the IRS, criminals are using fear to get people to go along with this phishing scam. It plays out something like this: You receive a robocall (often with a fake 202–Washington D.C.–area code). A recorded message explains that the IRS is filing suit against you and that you will be arrested if you don’t call a particular number. When you call the number, criminals pretending to be IRS agents (fake badge number and all) tell you that you’re in trouble–that you owe money to the IRS and that the police are coming to arrest you if you don’t pay. They may even know your name and address (easily found from online directories and caller ID). They then go on to tell you how much you owe and that you must pay it now to avoid being arrested.

When you tell them you don’t have that kind of money, they threaten you with arrest and jail time and even deportation. Although everyone is a target, the criminals often go after people with hispanic surnames hoping that immigrants (legal or otherwise) may be reluctant to contact the police.

The Payment Demand

The scammers urge their targets to get the money however they can–from family, neighbors, anyone. They then provide detailed instructions on how to send the money, usually involving the purchase of prepaid cards or through money transfer.  They insist that the victim avoid Visa or MasterCard prepaid cards (precisely because those brands offer fraud protections). In summary, the criminals do everything they can to ensure that they get your money and you have no way to get it back. There is a special place in hell for cowardly creeps who prey on innocent people’s fears. We have to do everything we can to stop them.

Because I’m a finance professional, I get calls from friends and neighbors asking for advice about this kind of thing. Some have already been victimized and others are afraid and wondering what to do. The most recent call I received was from a neighbor.  He was very upset so I told him I’d be right over. When I arrived at his house, he was literally shaking from the experience. I’m glad he was able to push through the fear and call me. I’ll tell you what I told him (and this comes directly from the IRS):

The Truth

The IRS will never do any of these things:

  1. Call to demand immediate payment, nor will the agency call about taxes owed without first having mailed you a bill
  2. Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe
  3. Require you to use a specific payment method for your taxes, such as a prepaid debit card
  4. Ask for credit or debit card numbers over the phone
  5. Threaten to bring in local police or other law-enforcement groups to have you arrested for not paying

Remember, the real IRS will first contact you by mail. If you really do owe money to the IRS, they don’t care how you pay it. They just want the money–they will never tell you it must be in the form of a non-refundable debit card/gift card/money transfer, etc.

What You Should Do

Get Educated
Review the information put out by the IRS. Here are a couple of warnings about phone scams:
http://www.irs.gov/uac/Newsroom/IRS-Repeats-Warning-about-Phone-Scams.
http://www.irs.gov/uac/Tax-Scams-Consumer-Alerts.

Report it
Follow this link to report any and all phishing incidents:
http://www.irs.gov/uac/Report-Phishing

The IRS further instructs:

“If you know you owe taxes or think you might owe, call the IRS at 1.800.829.1040. The IRS workers can help you with a payment issue.

If you know you don’t owe taxes or have no reason to believe that you do, report the incident to the Treasury Inspector General for Tax Administration (TIGTA) at 1.800.366.4484 or at www.tigta.gov.

You can file a complaint using the FTC Complaint Assistant; choose “Other” and then “Imposter Scams.” If the complaint involves someone impersonating the IRS, include the words “IRS Telephone Scam” in the notes.”

Please share this article with your friends and family. Even savvy people are falling for this scam. Just a few days ago, I received two phone calls pretending to be the IRS (on both my cell phone and home phone). Caller ID showed area code 202 and the message sounded very convincing. Don’t be fooled! Be informed and make sure others know that the IRS is NOT making these calls.

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