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The IRS Phone Scam: The Largest of Its Kind

March 27, 2014

Everybody expects news of tax scams during the tax season, but this year the IRS was surprised by a new tax scam that had already grown to become the largest of its kind. This phone tax scam uses the identity of the IRS to gather sensitive information and money from unsuspecting taxpayers.

The calls by scammers are often followed by calls that claim to be from the police. These follow-up calls are made to intimidate the taxpayer and force them into sharing tax, personal and/or financial information or to compel them into providing the caller with money via wire transfer or pre-paid debit cards to pay off an alleged tax debt.

The Fake Economic Stimulus Refund

People have reported receiving phone calls about the economic stimulus payments where the caller pretends to be an IRS employee and asks for the taxpayer’s Social Security number and bank account numbers. The caller tells the taxpayer that the IRS needs this information to process the taxpayer’s payment. People have also received bogus emails about the “2008 Economic Stimulus Refund.” Taxpayers must note that the IRS uses the information on their tax returns to process the stimulus payments and do not call or email taxpayers to gather this information.

The Fake Tax Debt

Along with the economic stimulus payments, the scammers are also using tax debt to obtain bank account and tax information of taxpayers. The callers claim to be from the IRS and inform taxpayers that they owe taxes that they must pay through wire transfer or a debit card. Upon reluctance, inquiries or refusal, the scammers intimidate taxpayers with arrest, deportation, or penalties. Often, such calls are followed by calls pretending to be the police.

This tax scam, which has been called “the largest scam of its kind that we have seen” by the Treasury Inspector General for Tax Administration, is claiming victims in every state. So far, taxpayers have been defrauded of more than $1 million with thousands of people across the country falling victim. People are encouraged to remain cautious and spread the information about the scam to others so that they are prepared should the fake IRS call.

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