POSTED ON March 24, 2014

By: Jigna Mehta

More than 20,000 taxpayers have been targeted recently by calls from fake Internal Revenue Service agents. Thousands of victims, nearly in every state, have lost a total of more than $1 million.

According to J. Russell George, Treasury Inspector General for Tax Administration, the fake IRS agents call taxpayers claiming they owe taxes and demand immediate payment using a prepaid debit card or a wire transfer. Those who refuse are threatened with arrest, deportation, loss of a business or driver's license.

The scam has been effective in part because the fake agents often know the last four digits of the taxpayer's social security number and they mask their caller ID, making it look like the call is coming from the IRS. In many cases, taxpayers have received follow-up calls that appear to be from the police department. The scammers also send emails that appear to be signed by real IRS officials, such as the use of IRS badge numbers.

The IRS does not initiate contact with taxpayers by emails or phone calls, rather it typically makes the first contact through mail. Also, the IRS does not demand immediate payment upon the first contact with the taxpayer. Instead, the taxpayers are always given a time window in which the IRS expects them to either send the payment or correspond with the IRS office. As a last resort, the IRS puts a lien on the property, but does not threaten to arrest or deport.

The IRS recommends the following courses of action in case such a phone call or email are received:

  • If you know you do not owe any taxes or have no reason to think that you owe any taxes, then hang up the call and reach out to the Treasury Inspector General for Tax Administration's office at 1-800-366-4448.
  • If you know you owe taxes or you think you might owe taxes, then hang up the call and reach out to the IRS at 1-800-829-1040. The IRS officials can help with any payment issues.
  • If you have been targeted by this scam, you can also contact the Federal Trade Commission and use their "FTC Complaint Assistance" at FTC.gov. Please add "IRS Telephone Scam" to the comments section of your complaint.

It is very important to be vigilant against such calls or emails. The taxpayers should not share any tax related information or confidential personal information with anyone other than their trusted tax and legal advisors.

Contact your GHJ tax advisors to learn more at (310) 873.1600 or www.greenhassonjanks.com