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Beware of this Scam from the “IRS”

by Amanda Han on May 1, 2014 · 11 comments

  
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Today I wanted to share a very important story with you that we just encountered at our office.

Yesterday we received a call from our client Julie.

She was in full panic mode as a result of a phone conversation with the “IRS” and we couldn’t blame her. Late Friday afternoon the phone rang and on the other end of the call was a person who identified himself as calling from the IRS. They indicated their IRS employee ID number and proceeded to tell Julie that they were calling regarding issues with previous year’s taxes. There was an urgent matter involving Julie’s old taxes, and potential liens were about to be placed on her home as well as garnishment of wages. It was extremely convincing because the “IRS agent” on the other end of the call was able to verify Julie’s SSN on the phone as well as her date of birth. So what exactly did they want? Immediate payment! According to the IRS agent, Julie needed to make immediate payment over the phone in order to stop the tax lien and garnishment of wages.

Thank goodness for Julie’s quick thinking. She sensed that something was not right with this call and politely asked for their number saying that she would call them back. She hung up the phone and called us immediately. After discussing the issue with Julie, we were confident that this was just another scam. Fortunately for Julie she did not provide any information to the caller. However, for a lot of other taxpayers, this is a scam that has been sweeping the country.

In fact, we just recently received the Internal Revenue Service warning to consumers about a sophisticated phone scam targeting taxpayers throughout the country.

The Scam

Victims of this scam are told that they are in debt to the IRS and what is owed must be paid promptly through a pre-loaded debit card or sent thru a wire transfer. If the person does not cooperate, he or she is then threatened. The false threats include but are not limited to: arrest, deportation if you are foreign, and suspension of your driver’s or business license. There have been reports that the scam callers have accents that are thick and heavy making it hard to actually understand what they are saying.

IRS Acting Commissioner Danny Werfel says: “This scam has hit taxpayers in nearly every state in the country. We want to educate taxpayers so they can help protect themselves. Rest assured, we do not and will not ask for credit card numbers over the phone, nor request a pre-paid debit card or wire transfer. If someone unexpectedly calls claiming to be from the IRS and threatens police arrest, deportation or license revocation if you don’t pay immediately, that is a sign that it really isn’t the IRS calling.”

According to the IRS, here are some other common characteristics of this new scam:

  • Scammers use fake names and IRS badge numbers. They generally use common names and surnames to identify themselves.
  • Scammers may be able to recite the last four digits of a victim’s Social Security Number.
  • Scammers spoof the IRS toll-free number on caller ID to make it appear that it’s the IRS calling.
  • Scammers sometimes send bogus IRS emails to some victims to support their bogus calls.
  • Victims hear background noise of other calls being conducted to mimic a call site.
  • After threatening victims with jail time or driver’s license revocation, scammers hang up and others soon call back pretending to be from the local police or DMV, and the caller ID supports their claim.

Related: BP Podcast 049: Real Estate Tax Tips, Jokes, and Loopholes With Amanda Han

So How Do You Know if the Call is a Scam?

Well, for starters, the IRS does not make their initial contact by phone. Before you talk to anyone at the IRS, you will generally receive a letter by mail indicating the issue or potential audit. If a call is necessary, that letter will indicate your contact person’s name at the IRS office.

If someone calls you and claims they are from the IRS, you need to take the following steps:

  • Take down their name and number, and as hard as it might be, politely hang up. Do not tell them with any of your personal information.
  • Speak with your CPA or tax advisor right away. If it is a scam, they should be able to let you know easily.
  • You can call the IRS directly at 1.800.829.1040 if you think you may owe taxes to them. If there really is a payment due, the IRS agents can take it directly at that time.
  • If you know for sure you do not owe taxes or suspect the caller to be a scammer you can report the incident directly to the Treasury Inspector General for Tax Administration at 1.800.366.4484.

Again, the IRS does not initiate contact with taxpayers by email to request personal or financial information. Unfortunately (or fortunately) the IRS currently doesn’t have a policy to communicate electronically with taxpayers. This includes any type of electronic communication such as emails and text messages (can you imagine getting text messages from the IRS while you are at a Friday night baseball game?).

The first IRS contact with taxpayers on a tax issue will generally occur via US mail.

So be cautious of this and other types of scams. It may not be a bad idea to share this information with other family and friends who may be a target.

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{ 11 comments… read them below or add one }

Robert Adams May 1, 2014 at 12:39 pm

thanks for sharing….I shared this on all my social media to help warn others as well.

Reply

Amanda Han May 1, 2014 at 12:47 pm

Thanks Robert. If your share can save even one person from this scam it was well worth it =)

Reply

PaulM May 1, 2014 at 12:42 pm

You are correct – you will ALWAYS receive written correspondence prior to any type of communication, not only from the IRS but from state entities as well.

It amazes me that people can’t yet distinguish spam/fraud from reality. The old adage, “send it to me in writing” still has teeth….sharp ones.

Reply

Amanda Han May 1, 2014 at 2:15 pm

Thanks Paul. I actually have seen fraudulent “written” info on the state level. Sometimes companies create fake state seals and send out letter requesting payments for state fees. Be sure to confirm those items as well before writing a check.

Reply

PaulM May 1, 2014 at 2:39 pm

Very true, and good point. I’ve been the recipient of other “official” documentation, but none from a tax collection entity. Fraud by mail I believe is extremely uncommon, however – too much liability for the scammer, I suppose.

I guess my point is that people shouldn’t get upset about a phone call, or a letter in the mail, without doing a reality check. If it appears out of the blue, and very strange, then it’s probably fraud. It’s also a good idea to verify any return address as a legitimate one – a quick Google search will do wonders…..

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Nick May 1, 2014 at 2:04 pm

I once got a call from an “IRS” scammer. They played a different scenario though. They said that because I was such a great taxpayer I earned a special reward and all I had to do to get it was to give them – you guessed it – my bank account number. Needless to say I hung up on them.

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Nick May 1, 2014 at 2:09 pm

Oh, and one more thing: the guy spoke with what I thought was Indian accent. So I asked: “Why does IRS speak with Indian accent?”. His reply was: “I am not an Indian! I am a Nigerian!”. I guess I hit some nerve with my question :-)

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Amanda Han May 1, 2014 at 2:16 pm

Haahaa. People will try anything.

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Dennis May 1, 2014 at 5:26 pm

Was the IRS agent asking for the money to be sent to Nigerian IRS office branch office, via Western Union?

I would have had some fun with these folks, giving then one of my dead beat tenants phone numbers.

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Nick May 1, 2014 at 8:45 pm

LOL. No, he wanted to send me money for being a good taxpayer. They either prey on greed or fear.

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Shaun May 10, 2014 at 6:29 pm

On a different thought, what strings do you think the IRS had to pull to get their vanity phone number to end in 1040? :)

Reply

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