By Bernie Becker - 03/20/14 04:44 PM EDT
Taxpayers should beware of “the largest scam of its kind that we have ever seen," a federal watchdog warned Thursday.
Those victims have collectively lost over $1 million because of the scams, the IG said, noting that it’s received more than 20,000 reports from almost every state.
“At all times, and particularly during the tax filing season, we want to make sure that innocent taxpayers are alert to this scam so they are not harmed by these criminals,” Russell George, the tax administration inspector general, said in a statement. “Do not become a victim.”
George and his office say scammers generally call unsuspecting taxpayers out of the blue, demanding payment for unpaid taxes via wire transfer or prepaid debit card. Victims are warned that they risk arrest, deportation or even the loss of their business if they don’t comply.
The inspector general noted that’s not the way the IRS operates. Instead, the tax agency usually first gets in touch about unpaid taxes by mail and wouldn’t ask for a credit card number over the phone. The IRS won’t ask for payment by wire transfer or prepaid debit card either, George said.
But it’s easy to see why the scam trips up taxpayers. The fraudsters often use fake IRS badge numbers and know the last four digits of the victim’s Social Security number. They can also make their call seem as if it’s coming from the IRS by manipulating the caller ID system, and will often follow up claiming to be the police.
“If someone unexpectedly calls claiming to be from the IRS and uses threatening language if you don’t pay immediately, that is a sign that it really isn’t the IRS calling,” George said.