IRS Impersonation Scam Is Largest In History, Cost Consumers $15.5M

(Mav)

(Mav)

The 2015 tax season has been fraught with complications, from the fraudulent use of tax returns to the “dirty dozen” scams meant to tear consumers away from their money. During a Senate Finance Committee hearing exploring ways in which consumers could better be protected from such hustles, federal investigators divulged more information about one of the most prevalent tax-time scams in recent years, saying it has now targeted 366,000 taxpayers to the tune of $15.5 million.

The Associated Press reports that federal officials believe the scam – which includes harassing phone calls demanding payments and threatening jail time – is the largest IRS phone scam in history.

Timothy Camus, a Treasury deputy inspector general for tax administration, told the Senate Committee that more than 3,000 people have fallen victim to the scheme since 2013.

Claiming victims in nearly every state, Camus says that one of the most egregious incidents included a man losing $500,000.

“The criminals do not discriminate,” Camus said. “They are calling people everywhere, of all income levels and backgrounds. The number of complaints we have received about this scam make it the largest, most pervasive impersonation scam in the history of our agency.”

Investigators believe that because of the widespread nature of the scam, it may be perpetrated by several groups.

So far, Camus reports that two people have been arrested in Florida, accused of being part of a scam that involved call centers in India contacting taxpayers and pretending to be IRS agents.

“These criminal acts are perpetrated by thieves hiding behind telephone lines and computers, preying on honest taxpayers and robbing the Treasury of tens of billions of dollars every year,” Utah Senator Orrin Hatch, chairman of the Senate Finance Committee, said. “Taxpayers must be more aware of the risks and better protected from attack and these criminals must be found and brought to justice.”

The current scam, which federal officials have been warning consumers about for more than a year, often involves fraudsters calling unsuspecting consumers purporting to be IRS agents and claiming they owe taxes.

The scammer then demands a payment using a hard to trace prepaid debit card or wire transfer. If a consumer refuses the request they are often threatened with arrest, deportation or loss of a business or driver’s license.

In some cases, Camus says, the would-be thieves know the last four digits of the consumer’s Social Security Number.

Already this year, there have been several incidents of the scam; thankfully not all have been successful.

In February, alert employees at a Washington Safeway store were able to prevent a woman from being added to the list of victims.

Employees say they became suspicious when the 54-year-old woman came into the store to purchase $2,400 in prepaid credit cards to pay the IRS for an outstanding tax bill.

In this case, the woman was contacted by a man who said that if she didn’t immediately pay the alleged IRS bill she would be arrested. When officers arrived to speak with the woman, she received another call from the purported scammer.

This time, though, he called using a computer system to display the phone number of the woman’s daughter. Police were able to determine the woman’s daughter was never in danger and that the call was indeed a scam.

Camus reminded the senators and consumers on Thursday that the IRS does not try to collect back taxes over the phone and does not use detectives to enforce tax collection actions.

“Our message is simple,” Camus says. “If someone calls unexpectedly claiming to be from the IRS with aggressive threats if you do not pay immediately, it is a scam artist calling. The IRS does not initiate contact with taxpayers by telephone. If you do owe money to the IRS, chances are you have already received some form of a notice or correspondence from the IRS in your mailbox.”

Fake IRS Agents Target More Than 366,000 in Huge Tax Scam [The Associated Press]