Beware the Bogus IRS

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Most people have seen bogus emails purported to be from the executors of the estate of Nigerian princes or other obscure foreign notables who want to give them millions of dollars, and sometimes they get bogus calls telling them they can win a lottery sweepstakes or receive debt relief.

But apparently one of the most effective and dangerous telephone scams these days involves what appears to be a call from the Internal Revenue Service.  The phone rings, and a very aggressive person on the other end of the line tells you that you owe money to the IRS.  This debt, you are told, must be paid promptly through a pre-loaded debit card or wire transfer.  If you refuse to cooperate (as, of course, you should), you’re threatened with arrest, suspension of a driver’s license or revocation of a business license.  In the case of recent immigrants, the caller may also threaten deportation.

In the most sophisticated calls, the scammer may know (and recite) the last four digits of your Social Security number, and may even use electronic spoofing to make it appear on your phone’s caller ID that the calling number comes from IRS headquarters.  A bogus follow-up email may be sent to support the bogus call, or sometimes a follow-up call from an individual who is pretending to be from the local police or the Department of Motor Vehicles.

The goal, of course, is to scare you out of your wits—enough so that you’ll make a payment so the federal authorities will go away and leave you alone.  In all, the IRS says that 5,000 victims have collectively paid over $26.5 million to bogus IRS scammers.

A more recent version of the scam involves a less aggressive phone call from somebody pretending to be an IRS agent, who says he or she wants to verify your tax information so your forms can be processed.  The scam artists say they’re looking at your tax return, and need a few additional.  The goal is to get you to give up personal information such as your Social Security number, bank numbers or credit card information that can then be used for identity theft scams.

The IRS has assured the public that it never, ever asks for credit card information over the phone, and it never requests prepaid debit card or wire transfer payments.  It never asks for you to divulge personal information by phone or email, or demands payments without giving you an opportunity to appeal the amount they say you owe.

If you receive a call that threatens police action and demands immediate payment, that is a certain indication that the caller does not represent the IRS.  Generally taxpayers who have a legitimate tax issue are contacted by mail.

If you receive one of these bogus calls, you can report the incident to the Treasury Inspector General at 800-366-4484.  And if you get an email that purports to be from the IRS, make sure you don’t click on any attachments.  Instead, forward the email, in its entirety, to phishing@IRS.gov.

About the Author: Bob Veres has been a commentator, author and consultant in the financial services industry for more than 20 years.  Over his 20-year career in the financial services world, Mr. Veres has worked as editor of Financial Planning magazine; as a contributing editor to the Journal of Financial Planning; as a columnist and editor-at-large of Dow Jones Investment Advisor magazine; and as editor of Morningstar’s advisor web site: MorningstarAdvisor.com.

Mr. Veres has been named one of the most influential people in the financial planning profession by Investment Advisor magazine and Financial Planning magazine, was granted the NAPFA Special Achievement Award by the National Association of Personal Financial Advisors, and most recently the Heart of Financial Planning Distinguished Service Award from the Denver-based Financial Planning Association. 

Sources:

IRS Says Scammers Changing Tactics Again

From the IRS: Aggressive and threatening phone calls by criminals impersonating IRS agents remain a major threat to taxpayers, but now the IRS is receiving new reports of scammers calling under the guise of verifying tax return information over the phone. The latest variation being seen in the last few weeks tries to play off the current tax season.

IRS Repeats Warning about Phone Scams

IR-2014-81, Aug. 13, 2014 WASHINGTON – The Internal Revenue Service and the Treasury Inspector General for Tax Administration continue to hear from taxpayers who have received unsolicited calls from individuals demanding payment while fraudulently claiming to be from the IRS.

IRS Warns of Pervasive Telephone Scam

Versión en español IR-2013-84, Oct. 31, 2013 WASHINGTON – The Internal Revenue Service today warned consumers about a sophisticated phone scam targeting taxpayers, including recent immigrants, throughout the country. Victims are told they owe money to the IRS and it must be paid promptly through a pre-loaded debit card or wire transfer.

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