The IRS has issued a consumer alert after more than 1,000 victims have lost up to $5 million to a phone scam.
WASHINGTON — It’s a telephone scam that has taken millions of dollars from victims who simply picked up the phone and said too much.
“This scam is a very serious problem that’s impacting many people,” says Mark Hanson, spokesman for the Internal Revenue Service.
It’s so serious that the IRS has issued a consumer alert and hopes to protect other victims from falling into the trap.
Since last October, Hanson says, more than 90,000 people have reported getting such a call. He says 1,100 victims have lost more than $5 million to the scam.
The scammers are calling people all across the country, claiming to be from the IRS. Callers say the victims owe back taxes and failure to call back can lead to an appearance before a judge for a federal criminal offense.
Hanson says the callers then tell the victim to pay the taxes using a prepaid card.
Hanson says the scammers are very sophisticated: Callers may know your name and part or all of your Social Security number. Hanson says they use fake names, may have fake IRS badge numbers and have even found a way to spoof Caller ID to make it look like the call is coming from the IRS.
In some instances, the scammers pretend to be the police, claiming to be coming to arrest the person if they don’t give sensitive information.
While the call can sound frightening and real, Hanson says, “What we want to tell taxpayers is that this is not how the IRS does business.”
Hanson says if back taxes are owed, the IRS always sends a notice in the mail first. It’s possible they will follow up with a phone call, but would never demand money over the phone.
Hanson advises people who get these phone calls to hang up, and never give out any personal information.
You can report the telephone calls to local law enforcement, to the IRS or to the Treasury Inspector General for Tax Administration.
Find more information about reporting these scams on the IRS’ website.
Hanson says the phone calls are being investigated and taken seriously by the IRS Criminal Investigation Division. So far, however, the telephone calls aren’t stopping.