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U.S. FTC: IRS imposter complaints up more than 2,300% in 2014

Michael Cooney | Jan. 27, 2015
FTC says taxpayer ID theft scams also at all-time high.

The scams that plague the IRS were on display again this week as the Federal Trade Commission said the number of consumer complaints about criminals impersonating IRS officials was nearly 24 times more than in 2013.

"We've seen an explosion of complaints about callers who claim to be IRS agents but are not," said Jessica Rich, director of the FTC's Bureau of Consumer Protection in a statement. "IRS employees won't call out of the blue and threaten to have you arrested or demand specific methods of payment."

According to the FTC, IRS impersonation scams typically consist of an individual contacting a consumer by phone, claiming that they are an IRS agent and that the consumer owes the IRS money. The callers suggest to consumers that they pay by wiring money or loading money on a pre-paid debit card. The callers often threaten arrest or legal action, and their calls may appear to originate from Washington, D.C. phone numbers; scammers may even know a consumer's full or partial Social Security number, lending credibility to the scam. The nearly 24-fold increase in complaints related to IRS impersonation indicate that scammers are using this technique against consumers across the country.

IRS impersonation scams prey on consumers' lack of knowledge about how the IRS contacts consumers. The IRS will never call a consumer about unpaid taxes or penalties the agency typically contacts consumers via letter. If consumers get a call purporting to be from the IRS, they should never send money once it's sent to the criminal, it is impossible to retrieve. They should instead hang up and report the scam to the FTC and to the Treasury Inspector General for Tax Administration at tigta.gov, the FTC stated.

Just last week the IRS said phone scams in fact for the first time top the Dirty Dozen scam list compiled annually by the IRS and catalogues a variety of common scams taxpayers may encounter any time during the year.

Phone scams top the list this year because it has been a persistent and pervasive problem for many taxpayers for many months. Scammers use fake names and bogus IRS badge numbers. They often leave "urgent" callback requests. They prey on the most vulnerable people, such as the elderly, newly arrived immigrants and those whose first language is not English. Scammers have been known to impersonate agents from IRS Criminal Investigation as well.

The IRS said that the Treasury Inspector General for Tax Administration (TIGTA) has received reports of roughly 290,000 contacts since October 2013 and has become aware of nearly 3,000 victims who have collectively paid over $14 million as a result of the scam, in which individuals make unsolicited calls to taxpayers fraudulently claiming to be IRS officials and demanding that they send them cash via prepaid debit cards.

 

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