Fake IRS call center shut down; IRS Scams to watch out for.

Despite the IRS receiving bad press lately for its bad public relations, this Forbes article highlights efforts to stop the IRS scammers from continuing to con US citizens with fake IRS calls threatening jail time or forfeiture actions.

As stated in the article, the callers pose as IRS officials and demand immediate payment and threatening jail or deportation for those failing to comply.  The article also highlights efforts by IRS to try and shut down this scam, i.e. Treasury Inspector General of Tax Administration’s (TIGTA) reporting of the apprehension of 5 individuals in May 2016 responsible for about $2 million in schemes defrauding 1,500 victims.

In the latest news, authorities in Mumbai, India have arrested 70 call center workers for tax related scams following police raids on call centers in India.  Additionally 750 other call center workers were detained as police continue to investigate.  The reports indicate that 7 call centers were being used to accumulate around $149,835 per day.

The IRS has also highlighted the 12 largest tax scams to avoid in its annual Dirty Dozen:  For 2016, the dirty dozen are (in no particular order) See IRS Website:

1. Identity Theft: Taxpayers need to watch out for identity theft especially around tax time. The IRS continues to aggressively pursue the criminals that file fraudulent returns using someone else’s Social Security number. Though the agency is making progress on this front, taxpayers still need to be extremely careful and do everything they can to avoid being victimized. (IR-2016-12)
2. Phone Scams: Phone calls from criminals impersonating IRS agents remain an ongoing threat to taxpayers. The IRS has seen a surge of these phone scams in recent years as scam artists threaten taxpayers with police arrest, deportation and license revocation, among other things. (IR-2016-14)
3. Phishing: Taxpayers need to be on guard against fake emails or websites looking to steal personal information. The IRS will never send taxpayers an email about a bill or refund out of the blue. Don’t click on one claiming to be from the IRS. Be wary of strange emails and websites that may be nothing more than scams to steal personal information. (IR-2016-15)
4. Return Preparer Fraud: Be on the lookout for unscrupulous return preparers. The vast majority of tax professionals provide honest high-quality service. But there are some dishonest preparers who set up shop each filing season to perpetrate refund fraud, identity theft and other scams that hurt taxpayers. Legitimate tax professionals are a vital part of the U.S. tax system. (IR-2016-16)
5. Offshore Tax Avoidance: The recent string of successful enforcement actions against offshore tax cheats and the financial organizations that help them shows that it’s a bad bet to hide money and income offshore. Taxpayers are best served by coming in voluntarily and getting caught up on their tax-filing responsibilities. The IRS offers the Offshore Voluntary Disclosure Program (OVDP) to enable people catch up on their filing and tax obligations. (IR-2016-17)
6. Inflated Refund Claims: Taxpayers need to be on the lookout for anyone promising inflated refunds. Be wary of anyone who asks taxpayers to sign a blank return, promises a big refund before looking at their records, or charges fees based on a percentage of the refund. Scam artists use flyers, advertisements, phony store fronts and word of mouth via community groups where trust is high to find victims. (IR-2016-18)
7. Fake Charities: Be on guard against groups masquerading as charitable organizations to attract donations from unsuspecting contributors. Be wary of charities with names similar to familiar or nationally-known organizations. Contributors should take a few extra minutes to ensure their hard-earned money goes to legitimate and currently eligible charities. IRS.gov has the tools taxpayers need to check out the status of charitable organizations. (IR-2016-20)
8. Falsely Padding Deductions on Returns: Taxpayers should avoid the temptation of falsely inflating deductions or expenses on their returns to under pay what they owe or possibly receive larger refunds. Think twice before overstating deductions such as charitable contributions and business expenses or improperly claiming such credits as the Earned Income Tax Credit or Child Tax Credit. (IR-2016-21)
9. Excessive Claims for Business Credits: Avoid improperly claiming the fuel tax credit, a tax benefit generally not available to most taxpayers. The credit is generally limited to off-highway business use, including use in farming. Taxpayers should also avoid misuse of the research credit. Improper claims generally involve failures to participate in or substantiate qualified research activities and/or satisfy the requirements related to qualified research expenses. (IR-2016-22)
10. Falsifying Income to Claim Credits: Don’t invent income to erroneously qualify for tax credits, such as the Earned Income Tax Credit. Taxpayers are sometimes talked into doing this by scam artists. Taxpayers are best served by filing the most-accurate return possible because they are legally responsible for what is on their return. This scam can lead to taxpayers facing big bills to pay back taxes, interest and penalties. In some cases, they may even face criminal prosecution. (IR-2016-23)
11. Abusive Tax Shelters: Don’t use abusive tax structures to avoid paying taxes. The IRS is committed to stopping complex tax avoidance schemes and the people who create and sell them. The vast majority of taxpayers pay their fair share, and everyone should be on the lookout for people peddling tax shelters that sound too good to be true. When in doubt, taxpayers should seek an independent opinion regarding complex products they are offered. (IR-2016-25)
12. Frivolous Tax Arguments: Don’t use frivolous tax arguments in an effort to avoid paying tax. Promoters of frivolous schemes encourage taxpayers to make unreasonable and outlandish claims Even though they are wrong and have been repeatedly thrown out of court. While taxpayers have the right to contest their tax liabilities in court, no one has the right to disobey the law or disregard their responsibility to pay taxes. The penalty for filing a frivolous tax return is $5,000. (IR-2016-27)

If you have specific and credible information of a tax scam, the IRS will pay between 15-30% of the taxes, penalties and interest it collects from the promoters/perpetrators of the tax schemes, or from the beneficiaries of the tax schemes.  Contact us to evaluate your specific and credible information and whether you should file a tax whistleblower claim to receive an award from the IRS.

How to Report IRS Scammers

March 17, 2016 Press Release
TIGTA - 2016-07
Contact: Karen Kraushaar, Director of Communications
Karen.Kraushaar@tigta.treas.gov
(202) 622-6500
 

J. Russell George Urges Taxpayers to Remain Vigilant Against Scammers

Inspector General Sees Progress in TIGTA’s Efforts to Impede IRS Impersonators

WASHINGTON — Noting progress in the counteroffensive against Internal Revenue Service impersonators who make threatening telephone calls to taxpayers, the Treasury Inspector General for Tax Administration nonetheless advised taxpayers to stay on high alert through the end of the 2016 tax filing season.

“Without question, TIGTA’s efforts have impeded these criminals’ ability to victimize taxpayers over the past few months,” the Inspector General, J. Russell George, said. He noted that TIGTA’s four-part strategy to thwart callers is working. “These efforts are producing results,” he said. “Where the perpetrators used to be able to get a victim every 40-50 calls, now they must make 300-400 attempts to claim a victim,” he added.

TIGTA’s counteroffensive consists of: 1) using an autodialer to call the scammers to advise them that their activity is criminal and to cease and desist; 2) working with telephone companies to shut down the telephone numbers used to perpetrate these crimes; 3) publishing telephone numbers associated with the criminal activity on the Internet; and 4) engaging in outreach efforts with the public, the media, Congress, and other stakeholders to educate taxpayers about the scam. In January, TIGTA launched a series of Public Service Announcements on YouTube; this month, they also became available on the IRS’s YouTube channel.

“Criminals view this scam as they do many others; it is a crime of opportunity,” he said in congressional testimony March 8. “While we plan on arresting and prosecuting more individuals, the scam will not stop until people stop paying the scammers money,” he added. “Our best chance at defeating this crime is to educate people so they do not become victims in the first place. Every taxpayer we protect from this crime is a victory.”

TIGTA has received reports of more than one million contacts since October 2013 and has become aware of over 5,500 victims who have collectively paid approximately $29 million as a result of the scam in which criminals make unsolicited calls to taxpayers fraudulently claiming to be IRS officials and demanding that they send them cash via prepaid debit cards, money orders or wire transfers from their banks.

“If someone unexpectedly calls claiming to be from the IRS or in a new twist, the Treasury Department, and uses the threat of legal action if you do not pay immediately, that is a sign that it is not the IRS calling, and your cue to hang up,” he said. “Again, do not engage with these callers. If they call you, hang up the telephone.”

Inspector General George noted that the scam has hit taxpayers in every State in the country. Callers claiming to be from the IRS tell intended victims they owe taxes and must pay using a pre-paid debit card, money order or a wire transfer. The scammers threaten those who refuse to pay with being charged with a criminal violation, a grand jury indictment, immediate arrest, deportation or loss of a business or driver’s license.

Here is what you need to know. The IRS generally first contacts people by mail – not by phone – about unpaid taxes and the IRS will not ask for payment using a prepaid debit card, a money order or a wire transfer. The IRS also will not ask for a credit card number or your bank information over the phone.

If you get a call from someone claiming to be with the IRS asking for a payment, or your credit card or bank account information, here’s what to do:

• If you owe Federal taxes, or think you might owe taxes, hang up and call the IRS at 800-829-1040. IRS workers can help you with your payment questions.
• If you do not owe taxes, fill out the “IRS Impersonation scam” form on TIGTA’s website, www.tigta.gov or call TIGTA at 800-366-4484.
• You can also file a complaint with the Federal Trade Commission at www.FTC.gov. Add “IRS Telephone Scam” to the comments in your complaint.

TIGTA encourages taxpayers to be alert to phone and e-mail scams that use the IRS name. The IRS will never request personal or financial information by e-mail, text, or any social media. You should forward scam e-mails to phishing@irs.gov. Do not open any attachments or click on any links in those e-mails.

Read more about tax scams on the official IRS website at www.irs.gov.