Yikes: 10,000 IRS impersonation scam calls are placed every week

Credit: Reuters

IRS imposter fraud lands on Capitol Hill

More than 10,000 IRS impersonation scam calls are placed every week and the Federal Trade Commission has so far this year gotten 22,000 complaints on the swindle (it got 52,000 on the scam in all of 2014).

Those were just two of the details about the growing plague of a multimillion dollar IRS impersonation scam aired on Capitol Hill this week as a US Senate hearing entitled “Catch Me If You Can: The IRS Impersonation Scam and the Government’s Response.”

“The Treasury Inspector General for Tax Administration has called this scam ‘the largest, most pervasive impersonation scam in the history of the IRS.’ According to the Inspector General, more than 434,000 Americans have been targeted by scammers impersonating IRS officials, and thousands of citizens have been defrauded of millions of dollars,” said Senate Special Committee on Aging Chairman Susan Collins (R, ME).

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According to the FTC, IRS impersonation scams typically consist of an individual contacting a consumer by phone, claiming that they are an IRS agent and that the consumer owes the IRS money. The callers suggest to consumers that they pay by wiring money or loading money on a pre-paid debit card. The callers often threaten arrest or legal action, and their calls may appear to originate from Washington, D.C. phone numbers; scammers may even know a consumer’s full or partial Social Security number, lending credibility to the scam. The nearly 24-fold increases in complaints related to IRS impersonation indicate that scammers are using this technique against consumers across the country.

IRS impersonation scams prey on consumers’ lack of knowledge about how the IRS contacts consumers. The IRS will never call a consumer about unpaid taxes or penalties – the agency typically contacts consumers via letter. If consumers get a call purporting to be from the IRS, they should never send money – once it’s sent to the criminal, it is impossible to retrieve.

Phone scams have been a persistent and pervasive problem for many taxpayers for many months. Scammers use fake names and bogus IRS badge numbers. They often leave "urgent" callback requests. They prey on the most vulnerable people, such as the elderly, newly arrived immigrants and those whose first language is not English. Scammers have been known to impersonate agents from IRS Criminal Investigation as well.

“These methods are typical of the other scams the Committee has investigated. But the IRS impersonation scam artists have added a pernicious twist: They are pretending to be government officials working for the IRS, a federal agency that makes many Americans apprehensive,” Collins stated. Not only that, “As best we can tell, many of these callsoriginate in boiler rooms in India. But the scammers use “Voice Over-Internet Protocol” technology to “spoof” the caller ID to make it appear the calls were placed by the IRS or even local law enforcement.”

If you’d like to read two very personal accounts of the IRS scam that were presented at the hearing, go here and here.

The IRS reminded consumers that they could know pretty easily when a supposed IRS caller is a fake. Here are five things the scammers often do but the IRS will not do.

According to the IRS the agency will never:

  • Call to demand immediate payment, nor will the agency 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.

The FTC added that government imposter scams have increased dramatically in the past few years. The Commission received only 65,000 government imposter scam complaints in 2013, that number increased to over 159,000 in 2014.

While the hearing was supposed to detail what was being done to combat the IRS scam in particular, not much detail on that was offered by any of the participants. In fact Collins took a shot at the Department of Justice for not testifying saying

“I do not understand the Department’s apparent indifference, and its refusal to testify is unacceptable. I can only conclude the Department does not want to be held accountable or answer questions about its poor record. There seems to be a pattern of lax enforcement by the Department when it comes to pursuing the various scams targeting seniors. If the Department contends it does not have the tools it needs to protect American citizens from these scams, it ought to be working with us to get these tools, not refusing to testify,” Collins stated.

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