Cases of identity fraud usually spike around tax season, but some scams are taking a more sinister turn.
A large number of people have reported to local law enforcement and federal agencies, including the IRS, that they have received calls from people posing as IRS agents who claim the taxpayer owes taxes and demand immediate payment using a prepaid debit card or a wire transfer. Those who refuse are threatened with arrest, deportation or loss of a business or driver’s license.
In a consumer alert issued in August, the IRS states that the con artists sound convincing and may know a lot about their victims, including the last four digits of their Social Security number, and usually alter the caller ID to make it look like it’s the IRS calling. The scammers use fake names and bogus IRS identification badge numbers and, if the victim does not answer the call, the con artist will leave an “urgent” callback request.
Officials stress that the IRS will not contact people by phone or email, but initially by mail. Furthermore, the IRS will never demand payment by debit card, credit card or wire transfer. (For more, click here.)
Timothy Camus, a U.S. Treasury Department deputy inspector general for tax administration, reported that more than 3,000 people have fallen for the ruse since 2013, and have been conned out of a total of $15.5 million. One victim lost more than $500,000 in the scam.
“The criminals do not discriminate. They are calling people everywhere, of all income levels and backgrounds,” Camus told the Senate Finance Committee at a hearing. “The callers often warned the victims that if they hung up, local police would come to their homes to arrest them.”
In fact, U.S. Sen. Johnny Isakson of Georgia said he received a similar call, and that while he realized it was not a real IRS agent, he said it was a “very convincing phone call.”
The scam is so widespread that investigators believe there is more than one group of perpetrators, including some overseas.
So far, two people in Florida have been arrested, Camus said. They were accused of being part of a scam that involved people in call centers in India contacting U.S. taxpayers and pretending to be IRS agents.
In recent years the IRS has stepped up efforts to detect large numbers of tax refunds going to the same address or bank account. The IRS and the inspector general’s office started warning taxpayers about the scam a year ago, and it has since ballooned. This year, it tops the IRS list of “Dirty Dozen” tax scams.
In 2012, the IRS started working more closely with U.S. attorneys’ offices around the country to combat tax refund fraud by people using stolen identities. Since then, the tax division has opened nearly 1,000 investigations and brought prosecutions against more than 1,400 people,
Using computer filters, the agency identified more than 517,000 suspicious returns and blocked $3.1 billion in fraudulent returns, as of October 2014, Camus said in his testimony.