Scam of the Week – The Threatening Tax Collector

Due to persistent scams that create havoc in the always chaotic tax season, the IRS as well as the BBB encourage everyone to file as soon as possible.

When a fake tax collector threatens their target with arrest and demands money, it becomes a difficult scam to classify. It has only recently gained its own category in BBB record keeping. Other organizations still categorize it as either an Impostor scam, which it is, or a Debt Collection scam, which it also is.

The Consumer Sentinel Network classifies the Tax Collection scam as an Impostor scam. It’s lassoed into the same category as the ‘grandparent scam.’ In that one, a con man claims to be a senior citizen’s grandchild and begs for bail money to get out of Mexican prison. The bulk of impostor scams are likely made up of tax collection scams. In Kansas City, for instance, for every victim who reports a grandparent scam, twenty people report tax collection scams. Despite a vital blow dealt to the scam in early 2017 by Indian authorities, the scam remains among the most prevalent.

Consumer Sentinel Network Data - "Impostor" Scams by year
YearTotalPercentRank
2013121,7206%#4
2014276,62211%#3
2015353,77011%#3
2016406,57813%#2
2017347,82913%#3
BBB Scam Tracker Data - Tax Collection
YearTotalPercentRank
2016795424.2%#1
201731196.52%#3

The Scam

Tax collections scams usually start with phone calls from someone claiming to be from the IRS. Sometimes scammers contact their targets via email or claim to be from the Department of Treasury, but for the most part they’re initiated by automated phone calls and the robocall says they’re the “IRS.” The recording makes every attempt to frighten the target.  Here is an example of a recorded IRS scam call.

The first thing mentioned in the recording is a “final notice.” It doesn’t identify the caller first. Instead, it makes sure the first thing the target hears is something scary. As with many other scams, it claims to be an authority (the IRS). Then the recording threatens a lawsuit, accuses of the target of fraud, and finally throws out the phrase “arrest warrant.” There isn’t much more it could do to ratchet up the level of fear and it does it all before the target can think.

When the target calls the number back, a real person, usually with a thick accent, tells the target to wire money to an “adjuster” or a supposed IRS agent. The recipient of this wire transfer is just someone’s name. It is never the name of a government agency. The scammer cranks up the rhetoric, threatening more jail time, court dates, etc.

Some Advice

Tax Collection scams all do these following four things.

  1. Claim to be a familiar authority
  2. Scare the target so they’re not thinking straight
  3. Give a limited time window in which to respond.
  4. Demand the target use unorthodox payment methods such as wire transfer or prepaid credit cards.

Here are some things to keep in mind if you get a call that claims to from the IRS:

  1. The IRS will never EVER call without sending you a letter in the mail first. If you get a call from the IRS and never received anything in the mail, hang up. It’s a scam. You can always hang up even if you think it’s for real and call the IRS directly. Here’s their number: 1-800-829-1040. They’ll give you advice on your taxes.
  2. The IRS can’t issue arrest warrants. As soon as the IRS says they’re issuing a warrant for your arrest, you’ll know it’s a scam. They’d have to go to a judge. Not only that, if you were charged with tax fraud, you’d already know by the time the IRS got around to giving you a call and friendly heads up that they’re about to arrest you. Most people don’t recognize the absurdity of the situation immediately because they were just scared half to death with threats of arrest. That’s what scammers are counting on.
  3. Take a breath. Relax. Pull the phone away from your ear and clear your head before saying anything. Don’t listen to threats. Just do your best to calm down and think through each step of what the person on the other end of the phone is saying. Does it make sense? If not, hang up. Don’t let fear get the best of you.
  4. The IRS will NOT ask for you to pay via wire transfer. They will not ask you to go to CVS and pick up prepaid credit cards. They will not ask for iTunes gift cards or anything more spectacular. The IRS accepts traditional payment methods. If the person you’re talking to demands a particular payment method, no matter their excuse, hang up. It’s a scam.

If you think you’ve been contacted by an IRS scam, you can report it to BBB by going to www.bbb.org/scamtracker or email the scam details directly to the IRS at phishing@irs.gov.

General Scams of the Week

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