Earlier this year, a Utah woman named Kayla S. experienced one of the most frightening scams you could ever imagine.
It all began when Kayla received a phone call from an out-of-state number she didn’t recognize.
The caller told Kayla they were with the IRS, that she was being audited and that she would be arrested in mere hours if she didn’t settle her debt immediately.
To make a payment, the caller instructed Kayla to drive to a nearby Walgreens, purchase a $500 iTunes gift card and give them the number on the back of the card.
Afterward, Kayla admitted this was the point when the call started to sound fishy, but she was so frightened by the threat of jail time that she complied with the caller’s demands.
After she gave them the gift card number, the caller quickly disconnected and Kayla realized she’d been duped.
Fool Me Once…
Unfortunately, IRS scams are increasing. According to the latest statistics, over $26 million was lost last year to IRS telephone scams. And usually, these scams originate in India.
They begin with a phone call from an unknown number telling you that you owe the IRS money you must pay immediately. The callers will often affect an American accent and may actually identify themselves as IRS agents. They might say, for example, their name is Special Agent Wayne Marshall, Badge No. 554398. Obviously, this introduction would immediately grab your attention and make you listen very carefully.
Next, the caller may ask you to confirm your name, address, Social Security number, date of birth or other personal details. Don’t be fooled — they are simply trying to get you to give them more information they can use against you.
After the caller has “verified” you’re the person they want to speak with, they’ll inform you that you owe back taxes, usually referring to a specific year. The use of a date adds legitimacy to their claim, and — let’s be honest — who can remember the details of their tax filing from, say, 2012?
Next, the caller will typically quote the tax code, citing Section 101(H), for example. Unless you’re somewhat familiar with tax code, you probably wouldn’t know if that was a real section or not.
Then they’ll say that if you don’t make a payment right away, you will go to jail, have your bank accounts frozen or your assets — including your house — seized.
If you agree to make a payment, the caller will tell you to send the money using a wire service like Western Union or some other untraceable method — like an iTunes gift card.
Unfortunately, it’s almost impossible for U.S. law enforcement to catch these criminals, because they usually work overseas, where it’s even more difficult to follow the money trail.
Fool Me Twice…
If you ever get a call like the one Kayla received, don’t fall for it. Most likely, you will never get your money back.
Remember, the real IRS will always contact you by mail. If you actually do owe back taxes, they will send you multiple notices, including certified mail, which requires a signature upon delivery.
Most importantly, the IRS would never ask for a specific form of payment like a wire transfer or any type of gift card. The IRS would also never threaten to send the police to your house to arrest you. Pursuing charges against you for back taxes is a long process and it goes through the court system.
If you’ve already received one (or more) of these calls, you may be wondering how the scammers targeted you in the first place. In this day and age of computer hacking and other forms of identity theft, criminals can get your information in many different ways. Sadly, one group of scammers was allegedly finding their victims by combing through obituaries for names of surviving relatives.
The bottom line is this: Even if you do owe the IRS, the U.S. government typically wants a check made out to the U.S. Treasury. The last thing they would ever ask for is an iTunes gift card.