IRS Scam Nets $1 Million From Unsuspecting People


Frank Smith* had been in deep sleep at 9am in his New Jersey home, when he got the call from the Internal Revenue Service (IRS) warning him of a tax fraud and threats of deportation within a matter of hours. Tired from his physically toiling night job and interrupted slumber, Frank’s mind froze with fear as he saw his 12-year law-abiding life in the US shattering in a matter of hours. Little did he know that he was about to be a part of an IRS phone scam that has netted $1 million from unsuspecting people so far.

The call that Frank got said that he had committed tax fraud by failing to pay taxes for the money he sent every month to his ailing mother in his home country. The caller said that his personal information, along with his social security and passport details, had been sent to the immigration department, from where an officer was on the way to “take him away for deportation.”

“I told him [the caller] that I have records for all the money I have ever sent and I had even cleared the necessary details with my accountant so there was no way that I could have committed any tax fraud. Even my driving license record is perfect! However, he told me some changes had been made in the law and it was my responsibility to keep track of them,” Frank shared of his ordeal, which lasted only 20 minutes but robbed him of almost $3,000.

“I recently got married, we just got a new home and I could not let this happen. I asked the caller how I could fix the matter as there was no way I wanted to get deported from a country that I call my home now. He told me according to his calculations, I owed the IRS $2,995, which if I paid right away could resolve the issue and clear my name. I did just that,” he said.

According to Frank, he cleared his “dues” by providing his credit card information to the “IRS agent.” It was “a couple of hours later” he thought he should call his accountant to ask about the new law. That is when he got to know he had been scammed.

“My world just fell apart. My mind went numb for the second time that day. I am not a rich man and I work two jobs to just make ends meet every month. The money I had in my bank belonged to my wife. We had planned to make some changes in our new house. It was gone. I notified my bank and the police right away. It was too late to save my money, but now I know better,” he said.

Apart from the IRS scam, which has netted more than $1 million from unsuspecting people, in another incident of phone scams in Lakewood, New Jersey, scammers called to inform the potential victim that the government has granted them a certain amount of money based on a recent draw the state of New Jersey had conducted to provide relief to its residents following Hurricane Sandy.

A typical conversation follows with the caller congratulating the recipient and explaining the process of the draw. The caller then commences to “verify” personal information, in some cases including social security numbers, along with full name and phone numbers.

Once the potential victim has been convinced, the caller then goes in for the final kill: “To get your grant, simply give us your checking account information, and we will direct-deposit the grant into your bank account!” Victims learnt they have been scammed when the promised money was not deposited into their accounts and when they noticed irregular activities on their cards.

The IRS has warned unsuspecting taxpayers against such phone scams. Treasury inspector general for tax administration, J. Russell George, said that this is the largest scam of its kind that they have ever seen. “The increasing number of people receiving these unsolicited calls from individuals who fraudulently claim to represent the IRS is alarming,” he said.

The reports of the scam have been made in almost every state of the US and more than 20,000 taxpayers have been targeted, whereas over $1 million has been lost, according to the IRS’s watchdog.

George said in genuine IRS cases, the agency first contacts the taxpayer by mail. Furthermore, any IRS agent would never ask for payment by debit or credit card and neither would they demand a wire transfer. “The Inspector General’s office is working to trace the origins of the bogus calls,” George added.

The IRS is working to address the issue of scam calls, which has netted unsuspecting people of more than $1 million. The agency said people who suspect that have received scam calls or other suspicious requests should contact the IRS. Moreover, anyone suspecting any promoters of abusive tax schemes or preparers of fraudulent returns should also notify the authorities at the following address:

Internal Revenue Service Lead Development Center

Stop MS5040

24000 Avila Road

Laguna Niguel, California92677-3405

Fax: (877) 477-9135

*Name has been changed to protect identity

By Faryal Najeeb

Victim Frank Smith*

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