Beware the Million-Dollar IRS Phone Scam

© 2014 Prof. Farok J. Contractor, Rutgers University

The internet era, where the cost of an international phone call is near zero, has also seen a rise in telephone scams emanating from foreign countries. On returning from India, I called my wife’s attention to an article in the April 4, 2014 edition of India Abroad“Over 20,000 taxpayers victims of IRS phone scam.” She had been telephoned by a person posing as an IRS employee threatening her with lawsuits and penalties for a supposed infraction unless she immediately sent them money.Unlike my wife, thousands of American tax payers (including, and perhaps especially, immigrant groups) have become victims. A similar story can be found in the March 21, 2014 edition of the China Securities Journal, IRS watchdog: Phone scam is largest ever,” which reported that US taxpayers have been bilked out of more than $1 million through this frighteningly effective phone scam.

Pamela describes her own recent encounter with an IRS phone scammer and posts this warning to taxpayers issued March 20, 2014 from J. Russell George, the Treasury Inspector General for Taxpayer Administration (TIGTA).

Important points from the statement to keep in mind:

  • The . . . IRS usually first contacts people by mail—not by phone—about unpaid taxes. And the IRS won’t ask for payment using a pre-paid debit card or wire transfer. The IRS also won’t ask for a credit card number over the phone.
  • The callers who commit this fraud often:

– Use common names and fake IRS badge numbers.
– Know the last four digits of the victim’s Social Security Number.
– Make caller ID information appear as if the IRS is calling.
– Send bogus IRS e-mails to support their scam.
– Call a second time claiming to be the police or department of motor vehicles, and the caller ID again supports their claim.

  • If you get a call from someone claiming to be with the IRS asking for a payment, here’s what to do:

– If you owe Federal taxes, or think you might owe taxes, hang up and call the IRS at 800-829-1040. IRS workers can help you with your payment questions.
– If you don’t owe taxes, call and report the incident to TIGTA at 800-366-4484.
– You can also file a complaint with the Federal Trade Commission at Add “IRS Telephone Scam” to the comments in your complaint.

Don’t let yourself be intimidated by these callers. And keep your checkbook closed until you’re sure it’s the “real” Uncle Sam contacting you—whatever you may think on April 15, he’s not really a pirate.

PDFs:  “Despite awareness, fake calls continue,” India Abroad, April 4, 2014 and Treasury Inspector General for Tax Administration_Press Release_2014-03-20.




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