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Telephone tax scam growing

By Kay Bell · Bankrate.com
Tuesday, August 19, 2014
Posted: 12 pm ET

The Internal Revenue Service has shifted most of its operations online, but tax scammers are relying on a 19th century invention.

Con artists pretending to be IRS agents are calling people via Alexander Graham Bell's communications-changing device and, in many cases, demanding money they claim is due the federal Treasury.

© Image Point Fr/Shutterstock.com

The fake IRS representatives tell the folks who answer the phone that if they don't pay up immediately, they could have their driver's license revoked or even face jail time. Unfortunately, many folks are scared into complying with the false tax ultimatum.

If this sounds familiar, then you're likely a regular reader of the Bankrate Taxes Blog. Back in March I wrote about these fraudulent tax telephone calls, which at that time the IRS was calling the largest tax scam ever.

Phone scam getting bigger

That dubious distinction is growing.

Through mid-August, the Treasury Inspector General for Tax Administration, or TIGTA, has received around 90,000 complaints about the scam-IRS calls via its own telephone hotline. More than 1,000 of those who were contacted believed the con artists and handed over an estimated $5 million, according to the IRS.

In the Central Texas area that I now call home, at least one elderly woman was bilked of $2,500, according to local news reports. A 67-year-old Austin resident also said that he had received at least 10 calls from tax scammers over the last six months. The man said he was threatened with arrest if he didn't pay the callers the back tax amount they said he owed. He called the police instead.

That's exactly what the IRS says you should do.

Report the scam

In addition, if you know you don't have an outstanding federal tax bill, let Uncle Sam know that a con artist contacted you by calling TIGTA's toll-free scam hotline at (800) 366-4484. Also let the Federal Trade Commission know by using the agency's "FTC Complaint Assistant" at its FTC.gov website.

"There are clear warning signs about these scams, which continue at high levels throughout the nation," said IRS Commissioner John Koskinen in a recent warning about the continuing scam. "Taxpayers should remember their first contact with the IRS will not be a call from out of the blue, but through official correspondence sent through the mail. A big red flag for these scams are angry, threatening calls from people who say they are from the IRS and urging immediate payment. This is not how we operate. People should hang up immediately and contact TIGTA or the IRS."

If, however, you think you might have an unpaid tax issue, go directly to the source. Call the IRS toll-free at (800) 829-1040. A real IRS agent at that number can help you determine any tax liability and discuss the tax agency's legitimate payment options.

Elderly often are targets

When the IRS first put out the alert about this scam, it noted that older individuals and recent immigrants were among the scammers' prime targets. As the tax scam incidents close to my home indicate, that's still happening.

And as the daughter of an older mom, I also urge any older person who gets a scam telephone call, tax or otherwise, to let your family know.

My 80-year-old mom is way too nice to everyone, in person and on the phone, but I've finally convinced her not to talk to anyone about anything that involves her money. She now tells such callers that she has to discuss it with me first.

Adult children with a family situation like mine: Don't wait until your older mom or dad becomes a target. Talk to your parents or other elderly relatives about this scam before they get a call so that they don't become another victim.

More tax info from Bankrate

Want the latest news on taxes, money-saving tax tips, tax scams and myriad other tax matters? Subscribe to Bankrate's free Weekly Tax Tip newsletter.

You also can follow me on Twitter: @taxtweet.

Veteran contributing editor Kay Bell is the author of the book "The Truth About Paying Fewer Taxes" and co-author of the e-book "Future Millionaires' Guidebook."

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22 Comments
John Gurchin
August 27, 2014 at 10:14 am

What I would like to know is how to track some of these scammers who are able to put their telephone number(s) up on your Caller Identification Device as Name: Unknown and their supposed telepone number being 000-000-0000 ? I would have thought that the Federal Communications Commission would have been on top of these jokers long ago and put up extreme penalties like at least 1 to 2 year in jail and up to $25,000 for each occurrence and then shut them down. And if they begin again doing the same thing somehow, then fine them more, like $50,000 and 3 to 4 years and so on. Where is our government (the FCC) to really regulate and fine these jerks enough so they will completely stop?

Finally if the calls are coming from overseas, the FCC ought to have the power to fine 1st the people behind the fraud and if not, then have their government pay the U.S. CLIENT, meaning WE THE PEOPLE and have that money sent directly to the party that had been the "target" of these rapscallions.

Ronald Peterson
August 23, 2014 at 1:27 am

On August 20.2014, I had a phone message from someone with a heavy accent saying that he was from the legal departrment of the IRS and that I needed to him back immediately because because the the legal dept. was charging me with tax fraud. I asked for his name and badge number and told him that I did not believe him and asked him to provide my Social Security Number to me. He made some lame excuse and I ended the call nd immediately called the local FBI Office and the IRS Office. I gave the agents the phone number, name and badge number that I had been given over the phone. The IRS agent indicated that he believed that it was a scam attempt, however, the Area Code was new to him.

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