Watch Out for IRS Phone Scams

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We recently published a blog about how scammers have been perpetrating a new type of fraud in which they file forged tax returns in an effort to collect fraudulent tax refunds. Now that the April 18 tax-filing deadline has passed, scammers are turning to another type of fraud to try to steal money from unsuspecting victims.

In this scam, thieves posing as IRS agents call mostly landline phones and tell individuals they owe tax debts to the IRS. If the debts aren’t paid immediately, the scammers threaten to file liens against individuals’ homes or even send the police to their house and have them arrested.

Seniors Most Vulnerable

According to the IRS, senior citizens and retirees tend to be at the greatest risk of this type of IRS phone scam. This is because they are more likely to still have a landline phone and to be home during the day or in the evenings when these calls are made. Many younger individuals have disconnected their landlines and rely solely on their cell phones for telecommunications.

Here’s how the scam typically works: Crooks leave official-sounding voicemail messages saying that an individual owes money to the IRS and needs to call them back immediately to arrange for payment of the debt. If the individual answers the phone, the crook will demand immediate payment of the supposed debt, usually via a wire transfer or a prepaid debit or gift card.

The IRS stresses that this is not how they operate. “The IRS doesn’t cold-call taxpayers for immediate payment,” stated the IRS’s US taxpayer advocate. Instead, the IRS would initiate contact via other methods, such as the U.S. mail, and give individuals the chance to appeal the amount due.

Another telltale sign of a scam is if a caller requests immediate payment in the form of a prepaid debit or gift card. Scammers like this method of payment because it’s virtually untraceable and it enables them to easily buy merchandise. It’s almost the same thing as shoplifting, but without nearly as much risk.

Fancy Technology Tricks

While it might sound like only a fool would fall for such a scam, many thieves use sophisticated technological tricks to make their calls look and sound legitimate. For example, they can often hack caller IDs so they read “IRS” and they give official-sounding employee badge numbers. They also might know some of your personal information, like your address or place of employment, that’s easily obtainable online.

If you ever receive such a call, the best thing to do is not answer the phone, or hang up immediately if you do answer. Then call the IRS Identity Protection Specialized Unit at (800) 908-4490 to report the call. Whatever you do, don’t share any personal information with these scammers or send them any kind of payment.

The frequency of this type of IRS phone scam could increase in the coming weeks as many people await receipt of their tax refunds. This could make potential victims vulnerable to answering a phone call that looks and sounds like it’s coming from the IRS. Please contact us if you have more questions about this IRS phone scam.


The commentary is limited to the dissemination of general information pertaining to Frontier Wealth Management, LLC's ("Frontier") investment advisory services. This information should not be used or construed as an offer to sell, a solicitation of an offer to buy or a recommendation for any security, market sector or investment strategy. There is no guarantee that the information supplied is accurate or complete. Frontier is not responsible for any errors or omissions, and provides no warranties with regards to the results obtained from the use of the information. Nothing in this document is intended to provide any legal, accounting or tax advice and Frontier does not provide such advice. This information is subject to change without notice and should not be construed as a recommendation or investment advice. You should consult an attorney, accountant or tax professional regarding your specific legal or tax situation.

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