“This is the IRS. Call us back immediately to avoid an arrest warrant being issued.”
Last week, one of our officers responded to a fraud complaint involving an unknown con artist who scammed a victim out of $15,000. It all began with a simple voicemail message, “This is the IRS. Call us back immediately to avoid an arrest warrant being issued.” Most people would likely have deleted the message but the hook was cast and curiosity got the best of our victim.
The victim returned the phone call and was sternly greeted by a male voice with a foreign accent. The caller advised the victim the IRS would have an arrest warrant by the end of the day unless they immediately made a payment of $3,500.00. Fearing the worst, the victim complied and wired the requested amount to a provided bank account. The “IRS” called the victim back to confirm payment had been received and further advised if they wished to resolve the case entirely, they should send an additional $11,500 by the end of the day. The victim obeyed by transferring the additional amount, bringing the total dollar amount to $ 15,000. Immediately after making the second deposit, the victim realized their taxes were up to date and they had been scammed. Some people may be quick to question the victim’s intelligence but in the victim’s defense, they were up against a seasoned professional and the entire incident happened rapidly under pressure. This type of scam is commonly referred to as, “IRS Impersonation Telephone Scam,” and is on the IRS “Dirty Dozen” list of tax scams for the 2016 filing season.
The IRS website provides a good overview how the scam works:
An aggressive and sophisticated phone scam targeting taxpayers, including recent immigrants, has been making the rounds throughout the country. Callers claim to be employees of the IRS, but are not. These con artists can sound convincing when they call. They use fake names and bogus IRS identification badge numbers. They may know a lot about their targets, and they usually alter the caller ID to make it look like the IRS is calling.
Victims are told they owe money to the IRS and it must be paid promptly through a pre-loaded debit card or wire transfer. If the victim refuses to cooperate, they are then threatened with arrest, deportation or suspension of a business or driver’s license. In many cases, the caller becomes hostile and insulting.
This type of scam relies in part on the law of probability and spending the least amount of time in identifying potential targets. In order for a con artist to be successful, they must first weed out skeptics and concentrate their time and efforts on those who are more susceptible. The most productive way of accomplishing this task is to let those people come to you. Assume a con artist was to call and leave 1,000 random voicemail messages every day for a month. Obviously, this would be difficult to do without some type of automation so let’s further assume the con artist uses a computer aided calling process so they don’t personally have to make each call. At the end of a month, roughly 30,000 voicemails would have been left. Most people will recognize the voicemail for what it is and delete the message. Let’s further assume one percent (1%) of the people who listen to the messages call back to inquire further, the con artist can expect about 300 return phone calls from those who are at least somewhat open to the idea they owe money to the IRS. Out of a pool of 300 receptive candidates, let’s say just one percent (1%) of those callers take the bait and send money. Successfully scamming just three people per month has potential for some pretty big payouts. Apply this formula to the example given and on the low end our culprit could expect to profit $3,500 (x3), or $10,500. On the high end, if our con artist could accomplish what they did with our victim with all three return callers, they would profit $45,000. Not bad for a month’s worth of work.
I believe these numbers are potentially modest. With the proper equipment and a few call takers, the 1,000 voicemails per day could easily reach double or triple that amount. These scams are especially effective on the elderly who may not be as familiar with current technologies such as number spoofing; which would allow the caller to use what appears to be a legitimate IRS number.
A recent notice from the IRS, IRS Tax Tip 2016–19, offers the following suggestions for avoiding telephone scammers. Note the real IRS will NOT:
Call you to demand immediate payment. The IRS will not call you if you owe taxes without first sending you a bill in the mail.
Demand tax payment and not allow you to question or appeal the amount you owe.
Require that you pay your taxes a certain way. For example, demand that you pay with a prepaid debit card.
Ask for your credit or debit card numbers over the phone.
Threaten to bring in local police or other agencies to arrest you without paying.
Threaten you with a lawsuit.
The IRS keeps track of these scams so you are encouraged to report related attempts and incidents:
Contact the Treasury Inspector General for Tax Administration. Use TIGTA’s “IRS Impersonation Scam Reporting” web page to report the incident.
You should also report it to the Federal Trade Commission. Use the “FTC Complaint Assistant” on FTC.gov. Please add “IRS Telephone Scam” to the comments of your report.
Keep in mind, the impersonation telephone scam is just one type of tax scam. Check out the IRS website for additional information on the following scams: E-mail, Phishing and Malware Schemes, Tax Preparer Phishing Scam, Email Phishing Scam: “Update your IRS e-file”, Phony Arguments, and Identity Theft Scams.
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