The Treasury Inspector General for Tax Administration (TIGTA) regularly warns the public to beware of thieves impersonating Internal Revenue Service (IRS) employees on the phone.
Next year could pose even more issues because Congress has instructed the IRS to use private bill collectors for certain overdue payments. IRS Commissioner John Koskinen has warned this could make it more difficult for taxpayers to distinguish between government tax collectors and con artists.
The good news — officials say they are making progress against the charlatans.
Counteroffensive measures “have impeded these criminals’ ability to victimize taxpayers over the past few months,” Inspector General, J. Russell George said. “Where the perpetrators used to be able to get a victim every 40-50 calls, now they must make 300-400 attempts to claim a victim.”
Yet he said the problem remains “the largest, most pervasive impersonation scam in the history of our agency.”
George told Congress that more than 5,400 victims have paid almost $29 million to criminals who make unsolicited calls to taxpayers claiming to be IRS officials seeking tax payments since October 2013. That’s an average of $5,370 per victim. The callers demand payments through prepaid debit cards, money orders or wire transfers. Folks who refuse to pay are threatened with anything from the loss of a driver’s license to arrest on criminal charges. TIGTA currently gets between 10,000 and 14,000 complaints each week.
“While we plan on arresting and prosecuting more individuals, the scam will not stop until people stop paying the scammers money,” George said.
But Sam isn’t arresting nearly enough, says Sen. Chuck Grassley (R-Iowa), chairman of the Senate Judiciary Committee.
“Despite the scope and prevalence of the IRS impersonation scam,” he complained in a letter to Deputy Attorney General Sally Quillian Yates, “the Department of Justice to date has prosecuted a very limited number of individuals for conduct related to these scams.”
One of those prosecuted was Sahil Patel. He was sentenced last year to 175 months in prison and $1 million in forfeiture for running a ring that impersonated FBI and IRS officials.
Patel’s “elaborate scheme involved impersonating law enforcement officers and using intimidation and fear to bilk over a million dollars from hundreds of unsuspecting victims,” said Manhattan U.S. Attorney Preet Bharara.
Related: On Monday, the IRS released “Top 10 Identity Theft Prosecutions for Fiscal Year 2015.”
IRS said it began 776 identity theft related investigations, in Fiscal 2015, resulting in 774 sentencings ranging to over 27 years.
In one scheme based in Alabama, two people “led a large-scale identity theft ring that filed more than 9,000 false individual federal income tax returns that claimed more than $24 million in fraudulent claims for tax refunds,” according to the IRS. A total of nine people, including postal employees, were convicted, with the ringleaders Keisha Lanier and Tracy Mitchell getting 180 months and 159 months, respectively, in prison.
Unrelated: Tax day this year is April 18, or April 19 in two states, instead of the usual April 15. The reason – April 15, a Friday, is Emancipation Day in the District, so most taxpayers have until April 18 to file a return and pay their taxes. That day, however is Patriot’s Day in Maine and Massachusetts, so taxpayers in those states have until April 19.
Who knew Sam paid such attention to relatively minor, which does not mean unimportant, holidays?
Joe Davidson is a columnist.