Complaints regarding identity thieves impersonating IRS officials are on the rise, according to statistics from the Federal Trade Commission’s Consumer Sentinel database. The FTC reported that the number of complaints in 2014 of such crimes has increased 24-fold since 2013.
For the fifth consecutive year, tax identity theft is the most complained-of crime that the FTC faces. Such crimes account for nearly a third of all identity theft complaints to the FTC and involve a scammer filing fraudulent tax returns in order to receive a refund. For these types of fraud, the FTC says that the best line of defense is to file taxes as soon as possible so that, even if the scammer does obtain a consumer’s Social Security number, they will not be able to get the refund because it has already been dispersed. Victims of tax identity theft are encouraged to contact the FTC and file a complaint immediately, either online or by phone at 1-877-FTC-HELP, or by contacting the IRS at 1-800-908-4490.
Another increasingly common form of tax fraud involves IRS impersonation. These scams generally involve an individual contacting a taxpayer by phone and claiming they are an IRS agent. They then tell the taxpayer that they owe the IRS money and suggest that they pay by wiring money or loading money onto a pre-paid debit card. To lend credibility to the claim, the scammers often have phone numbers that appear to originate in Washington, D.C., and may know all or part of the victim’s Social Security number. They also threaten arrest or legal action.
“We’ve seen an explosion of complaints about callers who claim to be IRS agents – but are not,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection. “IRS employees won’t call out of the blue and threaten to have you arrested or demand specific methods of payment.”
The IRS never calls a consumer about unpaid taxes or penalties. Instead, the IRS generally sends a letter. Yet, consumers who have little or no knowledge about the way the IRS operates easily are scared into giving into the scammers’ threats. Consumers are advised to never send money to these callers, as the money is impossible to get back. Victims of this type of fraud should hang up and report the scam to the FTC and to the Treasury Inspector General for Tax Administration at tigta.gov.
The complaints in the database are compiled accounts of complaints received by the FTC and other federal, state and local law enforcement as well as consumer protection agencies. In 2013, the FTC received 2,545 complaints about IRS imposter scams; in 2014 that number increased to 54,690. In 2014, the FTC received 109,063 complaints about tax identity theft, accounting for 32.8 percent of the 332,646 overall complaints about identity theft.
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