IRS Phone Scam: How To Identify and Protect Yourself from a Phony IRS Call

With the 2016 tax season upon us, American consumers need to be on high alert for tax-related phone scams. The IRS has been reporting a surge in IRS impersonators looking to steal taxpayers' money through sophisticated phone scam tactics. For the past three years, these types of phone scams have been at the top of IRS's "Dirty Dozen" list of tax scams. You may have even recently seen reports in your local news about these impostors calling and scamming people out of money in your area.

While you may think you'd be able to easily spot a fake call, fresh waves of criminal callers continue to get more convincing - and more aggressive - than ever. More and more Americans are falling victim to this scam everyday around the country.

In fact, their tactics have conned nearly 5,550 victims out of a collective $29 million since October 2013, according to the Treasury Inspector General for Tax Administration (TIGTA), and it continues to be a growing problem.

How IRS scammers convince their victims

Scammers call claiming to be IRS employees - convincing you they're legitimate through the use of fake names, spoofed caller ID, and falsified ID badge numbers. They often know key personal information about you, which may include the last four digits of your social security number.

These imposters then play off an individual's lack of knowledge about the IRS, their fear of consequences, and the fact that many Americans have fallen behind on their taxes. According to a 2009 estimate, over eight million individuals owed money to the IRS in the form of back taxes, including fees and penalties associated with filing late or from under-reported income.

Persistent and increasingly threatening, IRS scammers demand immediate payment through a pre-loaded debit card or wire transfer under threat of arrest, deportation, or loss of driver's license.

They will leave "urgent" callback requests and send follow up emails; or even call back pretending to be the police or a DMV representative, again with spoofed caller ID, to back their claim.

Five ways to spot the scam

While con artists continue to think up new tactics to trick victims, there are sure-fire ways to spot a phony IRS call quickly. If a caller tries one of these five measures you will know it's a scam because they are contrary to how the IRS actually operates:

  1. They demand immediate payment, and call you regarding owed taxes without first sending you an official bill via snail mail.
  2. They demand you pay taxes without allowing you to question or appeal the amount you owe.
  3. They require you to pay owed taxes a certain way, such as by prepaid debit card or wire transfer.
  4. They ask for your credit or debit card numbers over the phone.
  5. They threaten to bring in police or other agencies to arrest you for not paying.

What to do if you receive a fake IRS call

If you get a call from an alleged IRS employee utilizing any of the above tactics to request payment, immediately hang up on them and don't share any personal information.

You should then report the call to the TIGTA at 1-800-366-4484 or at www.tigta.gov, as well as the Federal Trade Commission's FTC Complaint Assistant.

If you're concerned you may actually owe back taxes, you can call the IRS directly at 1-800-829-1040 to confirm. The IRS offers many different ways to pay overdue taxes, and if you do owe they will be able to discuss your options with you.