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It might not be tax season, but that has not stopped phone scammers.

In a common scenario, the caller ID displays the toll-free IRS number and the individual on the phone identifies herself as Ann Smith (a common name) and even gives an IRS badge number. The problem is that the name and IRS badge number are fake.

Recently, the Internal Revenue Service and the Treasury Inspector General for Tax Administration repeated a warning about phone scams. Following up on some 90,000 complaints, the TIGTA noted that 1,100 victims have lost an estimated $5 million.

The IRS Commissioner John Koskinen advised that “taxpayers should remember their first contact with the IRS will not be a call out of the blue, but through official correspondence sent through the mail.” A threatening call demanding immediate payment should trigger a red flag and a taxpayer should hang up and report the contact to the TIGTA or IRS.

When it comes to collection of back taxes, the agency never will ask a taxpayer for a credit card or debit card information on a phone call. The IRS does not threaten jail time, a driver’s license revocation or the start of enforcement action following a phone call.

A notice of an IRS enforcement action, for instance a tax lien or tax levy, is sent through the mail. A levy allows the agency to collect tax owed directly from a bank account. Wage garnishment of up to 90 percent is another means the IRS does use to collect an outstanding tax debt.

Even though the telephone scammers have become more sophisticated, remember that the IRS never initiates contact via phone.


Source: CNN, “Fake IRS callers take $5 million from victims,” Blake Ellis, August 13, 2014.