The Internal Revenue Service’s watchdog warned taxpayers Thursday about a sophisticated nationwide phone scheme that it said is “the largest scam of its kind” it has seen.
The scheme involves callers claiming to represent the IRS and demanding immediate payments with a prepaid debit card or wire transfer, the watchdog said.
Treasury Inspector General for Tax Administration Russell George said that “thousands of victims” have paid more than $1 million to fraudsters and that his agency has received more than 20,000 reports of contact.
The callers have used much the same script, TIGTA officials said.
Officials also said that the callers often know the last four digits of the victims’ Social Security numbers, and they threaten arrest, deportation and the revoking of driver’s licenses — something the IRS is not authorized to do — to try to force compliance.
“If someone unexpectedly calls claiming to be from the IRS and uses threatening language if you don’t pay immediately, that is a sign that it really isn’t the IRS calling,” George said in a statement.
The callers use common names and fake IRS badge numbers, in addition to manipulating caller IDs, to appear more legitimate, officials say. Some also follow up with false IRS e-mails and with phone calls in which they pretend to represent the police or motor vehicles officials, TIGTA said.
The IRS generally contacts taxpayers first by mail or with personal visits from field agents, and it does not accept credit card information by phone, officials said.
The scam, which the IRS first identified in August, started out targeting immigrants, but the callers are now going after people of all backgrounds, officials said.
“The increasing number of people receiving these unsolicited calls from individuals who fraudulently claim to represent the IRS is alarming,” George said.
The Secret Service, which deals with financial crimes in addition to protecting national leaders and their families, is investigating the scam, alongside local law enforcement agencies. TIGTA officials said authorities are working with “major phone carriers” to track the calls.
The last widespread scam of similar proportions involved online “phishing” attacks that increased rapidly between 2006 and 2010, officials said.
TIGTA on Thursday warned taxpayers to be aware of other schemes such as lottery sweepstakes and solicitations for debt relief that fraudulently claim to come from the IRS.