IRS Warns of New Phone Scam Tactic

Brief Analysis:
America’s Internal Revenue Service (IRS) is warning about yet another tactic being used by phone scammers. Rather than threaten victims with arrest if they do not immediately pay a supposedly outstanding tax bill, these scammers simply claim that the IRS needs more information before it can process your tax return. Via this ruse, the scammers can collect a large amount of your personal and financial information and subsequently use this information to steal your identity.

Beware IRS Phone Scams

Detailed Analysis:
America’s Internal Revenue Service (IRS) has published a consumer alert that warns taxpayers about a new tactic being used by phone scammers.

More usually, these scammers cold call you and claim that you owe money to the IRS and must make a payment immediately to avoid imminent arrest or further legal repercussions. These scammers are very intimidating and often succeed in tricking vulnerable people into sending them money via prepaid debit cards or wire transfers.

But, in this version, the approach of the scammers is seemingly more reasonable and a lot less threatening in tone. The scammers, posing as IRS staff members, call to inform you that they have received your tax return but need more information from you before they can process it. They then, politely, ask you to supply or ‘verify’ a large amount of your personal and financial information. They may ask for credit card numbers, bank account details, and identifying information such as your Social Security Number and your driver’s licence number. They may sound quite professional on the phone, and may not ask you to send any money or threaten you with arrest if you don’t comply with their requests. Thus, you may well never suspect that a scam is afoot and give them the information they request. At the end of the conversation, you may think that you have successfully resolved the supposed problem with your tax return and go about your business blissfully unaware that you have just been scammed.

Meanwhile, the scammers can use the information you supplied to steal your identity. Depending on the amount of information you supplied, they may be able to conduct fraudulent transactions using your credit card, and perhaps even hijack your bank account.

Phone scammers are often very skilled at impersonating trusted authority figures such as IRS staff. But, however plausible their claims may seem, do not comply with their instructions. The consumer alert notes that the IRS will never:

  • Call to demand immediate payment over the phone, nor will the agency call about taxes owed without first having mailed you several bills.
  • Call or email you to verify your identity by asking for personal and financial information.
  • Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
  • Require you to use a specific payment method for your taxes, such as a prepaid debit card.
  • Ask for credit or debit card numbers over the phone or e-mail.
  • Threaten to immediately bring in local police or other law-enforcement groups to have you arrested for not paying.

The IRS alert also includes information about how to report such scam attempts.

Note that, while this article focuses on the IRS warning and the threat to US consumers, taxpayers in other jurisdictions around the world are also regularly targeted by such phone scammers.  Variations of these tax related scams are also distributed via email.

Last updated: March 21, 2016
First published: March 21, 2016
By Brett M. Christensen
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