The Dirty Dozen is compiled annually by the IRS and lists a variety of common scams taxpayers may encounter any time during the year. However, many of these schemes peak during filing season – especially scam phone calls.
Here’s how the scams typically work:
In the most common version of the scam, callers posing as IRS representatives contact taxpayers by phone, claiming that they owe money to the IRS. Taxpayers are told that they must pay the balance promptly using a pre-loaded debit card or wire transfer or be subject to punishment, including arrest, deportation or suspension of a business or driver’s license. The callers may have heavy foreign accents, use common names and fake badge numbers. The number on the caller ID may also look like the IRS since the scammers may spoof the IRS toll-free number.
In another version of the scam, callers posing as IRS representatives advise potential victims that two certified letters were sent to the taxpayer in the mail but were returned as undeliverable. The callers then threaten to arrest the potential victim if a payment is not immediately made through a prepaid debit card. The scammer also tells the victim that the purchase of the card is linked to the Electronic Federal Tax Payment System (EFTPS) system. To ensure that the potential victim doesn’t back out, the caller warns the taxpayer not to contact their tax preparer, an attorney or their local IRS office until after the tax payment is made.
In the most recent version of the scam, thieves use phishing and other schemes to steal client data from tax professionals. Then, using that data, they file fraudulent tax returns and use the taxpayers’ real bank accounts to deposit erroneous tax refunds. Finally, the thieves, posing as IRS, debt collection agency officials, or law enforcement, call attention to the error and ask taxpayers to return the money to them.
The Treasury Inspector General for Tax Administration (TIGTA) reports they have become aware of over 12,716 victims who have collectively paid over $63 million as a result of phone scams since October 2013.
As a reminder, the IRS will never:
Don’t engage or respond with scammers. Here’s what to do if you receive a suspicious phone call or message:
Don’t fall for the tricks. Keep your personal information safe by remaining alert. And, when in doubt, assume it’s a scam. For tips on protecting yourself from identity theft-related tax fraud, click here.