The IRS Tax Scam That Can Rob You Blind
Life + Money

The IRS Tax Scam That Can Rob You Blind

The phone rings. You’re at home, organizing your tax receipts – so you’re stunned when the caller identifies himself as an agent at the IRS. 

The agent says you owe money to the IRS and you must pay now, through a prepaid debit card or payment voucher. He has your name, your address, and other personal details. There’s a warrant out for your arrest, he says, and if you don’t pay within two hours, you could be arrested for tax fraud, be deported or even lose your driver’s license. 

Related: The 10 Worst States for Taxes in 2015 

If this sounds like your worst nightmare – guess again. It’s been happening to thousands of Americans just like you. 

The Treasury Inspector General for Tax Administration (TIGTA) J. Russell George said this week that his office has received reports of nearly 290,000 of these phone calls since 2013. Some 3,000 people across the country have paid a collective $14 million in that time because they fell for what George called the largest scam of its kind. 

“It is critical that all taxpayers continue to be wary of unsolicited telephone calls from individuals claiming to be IRS employees,” George said in a statement. “The callers are aggressive, they are relentless, and they are ruthless. They will say anything to con you out of your hard-earned cash.” 

He added, “The increasing number of people not only receiving but accepting these unsolicited calls from individuals who fraudulently claim to represent the IRS is alarming. At all times, and particularly during the tax filing season, we want to make sure that innocent taxpayers are alert to this scam so they are not harmed by these criminals. Do not become a victim.” 

Related: The Caller ID Scam You Must Know About 

So what else should taxpayers know? First, the IRS always contacts people by mail if they owe taxes. So if the IRS’s first contact with you is by phone – be wary. The agency also never asks taxpayers to pay using a prepaid debit card or wire transfer. Actual IRS agents are also not supposed to ask for credit card information over the phone, so if someone goes down that path, consider it a bright red flag. 

Second, if you get a call of this kind, hang up, call the IRS or the FTC and report the call. You may also need to alert local law enforcement. 

This is only one type of scam, of course. The agency cautions taxpayers to beware of identity theft and other forms of tax fraud. The IRS paid about $5.2 billion in fraudulent identity theft refunds during the 2013 filing season, the Government Accountability Office said.

For its part, the agency also prevented about $24.2 billion from being lost to identify fraud. IRS officials recommend that filing early can help prevent fraud – or at least give the agency a better chance to detect it.

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