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« Bitcoin Phishing Email Alert: 3 Red Flags It's a Scam | Main | Yet Another GM Recall, This Time for Power Steering Problems »

IRS Phone Scam Is Biggest Ever: $1M Lost, 20K Victims

The largest-ever IRS phone scam is making the rounds. Thousands of victims have been conned out of more than $1 million by fraudsters posing as IRS agents demanding tax payments.

The Treasury Inspector General for Tax Administration (TIGTA) says it has received more than 20,000 complaints from people, including recent immigrants, about the scam, Reuters reports.

How does the massive tax scam work, and what should consumers watch out for?

IRS Tax Scam

The IRS phone scam begins with a call from someone posing as an IRS agent, telling intended victims they owe taxes and must pay using a prepaid debit card or wire transfer. The fraudsters threaten those who refuse to pay with arrest, deportation or loss of a business or driver's license, Reuters reports.

To make the scam seem more legitimate, the scammers often know the last four digits of the taxpayer's Social Security number. Don't rely on your caller ID to identify the scam -- the scammers can manipulate a victim's caller ID to display a local IRS office number.

In many cases, taxpayers -- particularly those who hang up on the call -- will get follow-up calls that appear to be from their state motor vehicle agency or the police. The scammers also send follow-up emails that mimic the IRS insignia and even appear to be signed by real IRS officials.

IRS Tax Scam Red Flags

The IRS contacts taxpayers by U.S. mail. The IRS will never do any of the following things:

  • Ask for payment via debit card or wire transfer;
  • Ask you to provide a credit card number over the phone;
  • Request personal or financial information by e-mail, text or social media;
  • Use threatening language if you don't pay immediately.

What to Do If You Get a Call

If you receive a call from someone claiming to be from the IRS and he or she is asking for payment, here's what to do about the consumer scam:

  • If you owe (or think you owe) federal taxes, hang up and call the IRS directly via a toll-free number, (800) 829-1040.
  • If you don't owe taxes, call and report the incident to the Treasury inspector general of tax administration at (800) 366-4484.
  • If you'd like, file a complaint with the Federal Trade Commission. Add "IRS Telephone Scam" to the comments in your complaint.

Also, don't open emails that are purportedly from the IRS (and definitely don't open attachments or click on links in the email). Forward it to phishing@irs.gov.

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