Lessons Learned from a Busted IRS Scam
Police in a suburb of Mumbai, India arrested 70 people this week who worked at a call center that allegedly employed 700 people to impersonate U.S. tax officials to scare Americans into paying millions to avoid arrest and fake fines.
The authorities allege the individuals arrested managed nine call centers where employees posed as Internal Revenue Service officials and made calls to Americans through the night, accusing them of not paying their taxes and threatening them with jail time and financial ruin if they refused to pay up. The local police estimated the business was making over $150,000 a night.
According to the Inspector General for Tax Administration, over the last three years alone the U.S. Treasury has fielded over 1.7 million complaints from victims who claim to have lost over $47 million in IRS scams.
Indian police from Thane, the suburb bordering Mumbai, shared a few recordings of the calls, which followed a long and complicated script that instructed the victims to nearby stores to buy $500 Apple gift cards. The victims were then told to share the gift cards’ registration numbers to give control of the cash to the call center worker.
To avoid falling into this trap, here are some of the tricks used in the scammers’ script.
1. Shower the target with harsh punishments
The callers told the targets the maximum sentence was five years and the maximum fine was $100,000. They also said their 401k, wages and benefits would be frozen, passport and state ID seized, and social security number would be blocked from receiving benefits including disability and unemployment benefits, child protection income, and retirement or pension income.
2. Tell the target resistance is futile
They told the victims that while they could try to hire a good criminal attorney, it would cost $25,000 to $30,000 in attorney fees, and it would be much easier to settle out of court. Not cooperating, they warned, would result in officers showing up at the door with an arrest warrant within 45 minutes.
3. Don’t let the target hang up until they pay up
The callers told the victims that if the call got disconnected, the “resolvement option would be canceled.”
4. Use official sounding names
The Electronic Federal Tax Payment System was actually just an iTunes gift card. A Government Affiliated Store was actually a Walgreens, Best Buy, or Target.
5. Repeatedly tell the targets they are being recorded
The callers claimed the lines were being recorded and monitored by the IRS and jury members and told them not to interrupt.
6. Threaten to use the media
Threats were made to notify national news channels, newspapers, and radio outlets of the crime committed against the IRS if the target refused to cooperate.
7. Call for a higher up
The initial caller would often “transfer” the call to a “senior Treasury officer” while providing bogus names and badge ID numbers.
8. Don’t tell anyone
The callers would tell victims they were not entitled to discuss the confidential information with any third parties until the “issue is resolved.”
Beware of scammers who use shady tactics to try to extract money or information from you. To make sure you are safe, consider using a professional tax expert who understands all the applicable state and federal regulations.
Estate Planning & Tax Preparation with Cohen & Burnett
For over 25 years, Cohen & Burnett has provided Washington, DC area residents with Tax Strategies and Estate Planning and Implementation. For more information on our firm and our broad base of experience, please visit our homepage today.
Modern Estate Planning Lessons from King LearRead More
Tax Planning 101: Retirement And Educational SavingsRead More
Choosing a Fiduciary: What is the Fiduciary’s Role in Estate Planning?Read More
What is Estate Planning, anyways?Read More
10 Challenges when a Family Fiduciary Administers an Estate or TrustRead More
4 No-Nonsense Reasons to Create an Estate PlanRead More
IRS Revises Form 1098, Tightening Scrutiny on Mortgage Interest DeductionRead More
Beware: Tax Scammers Disguised as the IRSRead More
A Guide to Questionable Small Business Tax DeductionsRead More
Tax Return 2016: Getting to Know Your Tax FormsRead More
Estate Planning and Tax DeductionsRead More
The Documents You Need for Tax FilingRead More
Why to File Early and Never Put off Tax PreparationRead More
Tax Strategies for the Rising ‘Gig Economy’Read More
Forbes Floats Tax Strategies for 2017Read More
Tax Season is Here: Important Dates and Reminders from the IRSRead More
Estate Planning: Estate, Gift and GST Tax Updates for 2017Read More
Alzheimer’s and Estate PlanningRead More
The Damaging Effects of an Overly Complicated Estate PlanRead More
What the Election Means for Your TaxesRead More
Is the Estate Tax a Double-Tax?Read More
Estate Planning Digital Media Edition: Who Inherits Your Library?Read More
5 Must Have Documents to Avoid Costly Estate Planning ErrorsRead More
Lessons Learned from a Busted IRS ScamRead More
Planning on Getting Married? Consider the Tax Implications First!Read More
How to Avoid Estate Planning MishapsRead More
Fighting Tax-Related ID Fraud…with SmartphonesRead More
IRS Extends Deadline for 401(k) RolloversRead More
Proposed Treasury Regulations Would Eliminate a Popular Estate Planning TechniqueRead More
IRS Loophole Leads to Tax Deductions for Excessive Water UseRead More
Estate Planning: How to Avoid Playing Estate DetectiveRead More
Estate Planning and Wealth Transfer: Two Concepts, One GoalRead More
Financial Roundup: Tax Loopholes, 401(k)s and IRAs, and Health of the EconomyRead More
What is Your State’s Tax Burden, and How Can You Lower It?Read More
Domestic Asset Protection Trusts & Economic Uncertainty: What You Need to KnowRead More
LIFE INSURANCE TRUST FOR YOUR CHILDRENRead More
Beneficiary Designations & Irrevocable Trusts: Preserving Your IRARead More
Retirement Planning 101: Five Long-Term Care Myths DebunkedRead More
Congressional Report: What’s on Tap for TaxesRead More
Future Elderly Boom Makes Estate Planning a Necessity NowRead More
Here’s How IRS Budget Cuts Could Affect YouRead More
FDIC Insurance Coverage for Revocable TrustsRead More
A Headline-Grabbing Estate Planning Blunder to AvoidRead More
Changing, Adding To, and Revoking Your Will or TrustRead More
5 Legitimate Reasons People Have Offshore AssetsRead More
Estate Planning Basics: Part IIRead More
Estate Planning Basics: Part IRead More
Tax Implications of Business Entity TypesRead More
Practical Uses of an Asset Protection TrustRead More
What’s New this year on Your 2015 Tax ReturnRead More
Four Important Tax Changes in the Proposed Budget for 2017Read More
DOD Releases Important Regulation Pertaining to Survivor Benefit PlansRead More
As Fiduciary Rule Advances, Lawmakers Pore Over Retirement Plan AccessRead More
Preparation and Proactivity: the Keys to Getting Through an IRS AuditRead More
New Year’s Resolutions: Avoid IRS Problems and Save on TaxesRead More
Kiddie Tax: Gift for the Kids or for the IRS?Read More
Estate Planning in 2016 — What To Know in the New YearRead More
Congress offers Tax Benefits for ChristmasRead More
Asset Protection Planning in the Age of LawsuitsRead More
Surprising Developments in Estate PlanningRead More
IRS Regulation to Limit Valuation Discounts on Family Businesses Entities?Read More
Estate Planning Tips for National Estate Planning Awareness WeekRead More
National Estate Planning Awareness Week is Upon Us!Read More
Advantages to Choosing a Corporate TrusteeRead More
Lessening Tax Impact on Retirement SavingsRead More
How Much Will Medicare Premiums Rise in 2016?Read More
Did You Participate in National Make a Will Month?Read More
Estate Planning in a NutshellRead More
Recent Favorable Rulings for TaxpayersRead More
COMMON MISTAKES WHEN TEACHING MONEY MANAGEMENTRead More