IRS phone scam takes a hit, but don’t let your guard down

The Better Business Bureau and many local police departments have been warning consumers about a phone scam that is demanding money and threatening jail time over bogus unpaid tax bills. In fact, the IRS scam has consistently been the top scam reported to the BBB for the past couple of years. The scam has accounted for one in four reports to BBB Scam Tracker during its first year of operation.

In early October, police in Mumbai, India, raided a call center where there were more than 750 employees making these calls. Since this raid, BBBs have seen a significant decline in the number of complaint calls and reports about the IRS scam. Although it is welcomed, it is rare to see such immediate success from a raid such as the one in India. Hopefully, this decline will continue but BBB wants consumers to remain vigilant and educate themselves on how this type of scam works.

Consumers have been contacted by someone saying they are with the IRS or the Treasury Department telling them they owe money, and it must be paid promptly. Consumers are instructed to buy a preloaded debit card or wire transfer funds to pay the debt. If the victim refuses to cooperate, they are threatened with arrest, home foreclosure, deportation or suspension of business or driver’s license. The caller often times becomes very demanding, hostile and insulting.

The BBB wants consumers to know the IRS will never ask you for credit card numbers over the phone or request a prepaid debit card or wire transfer. The IRS will most likely contact taxpayers by mail with regards to tax issues.

These callers simply try to scare consumers into paying them money they do not owe. Consumers should not be threatened into making any payments they are not certain they owe. The scammers use these strong-arm tactics because they know many people will pay the money to avoid being arrested.

Some other characteristics of this scam:

▪  Scammers use fake names and IRS badge numbers.

▪  Scammer may actually have the last four digits of your Social Security number.

▪  Scammers can spoof caller ID phone numbers, making it appear the call is really from the IRS or their local police department.

▪  Victims can hear background noises of other calls being conducted to mimic a call site.

▪  After threatening jail time or deportation, scammers hang up and soon call back pretending to be from the local police, to help support their claim.

▪  Never trust callers who use threats and hostility to bully their targets into doing what they want. This is a scare tactic many scammers use.

The BBB recommends the following if you receive a similar type call:

▪  If you know you owe taxes or think you might owe taxes, call the IRS directly or your accountant.

▪  If you know you don't owe taxes, call and report the incident to the Treasury Department inspector general for tax administration at 800-366-4484 or www.treasury.gov.

▪  If you've been targeted by this scam you can contact the Federal Trade Commission and use their complaint assistant at www.ftc.gov.

▪  Also report your experience on the BBB’s Scam Tracker at www.bbb.org/scamtracker/central-georgia, so we can track the activity and warn others.

▪  If you are not sure if the call is legitimate or not, contact the BBB at 800-763-4222 or at www.bbb.org.

Remember as we head into tax season, we can expect that the IRS name is going to be used in a multitude of scams so be alert and never provide your personal information.

This story was originally published October 31, 2016 at 2:29 PM with the headline "IRS phone scam takes a hit, but don’t let your guard down."