IRS phone scamAs if tax season wasn’t enough of a hassle, the IRS is warning taxpayers about a sophisticated phone scam being conducted right now. This scam has already taken a combined $1 million from more than 20,000 people in almost every state across the country. According to J. Russell George, Treasury Inspector General for the Tax Administration, it is the largest scam of its kind.

How does this phone scam work?

Targets of this scam receive a phone call from someone claiming to be from the IRS. They are told money is owed to the IRS and they must repay it immediately via wire transfer or pre-loaded debit card. If the target refuses to pay, the callers become hostile and insulting and often threaten arrest, deportation or suspension of license to force compliance. What makes this phone scam so sophisticated is the scammers’ ability to manipulate caller ID information to spoof the IRS toll free number as well as local police/DMV numbers to scare people into paying. They will also use fake IRS badge numbers and send emails purporting to be from the IRS to support their case. In some instances, the scammers were able to recite the last four digits of the target’s social security number.

How can I protect myself from this and other scams?

1. Check your source. The IRS is reminding people that it usually contacts taxpayers who owe money on their taxes by postal mail at first, not telephone. The IRS will never contact anyone via email, text message or social media so you can be sure anything you receive by those channels is probably illegitimate.

2. Don’t give out sensitive information. There is never any reason for the IRS to request confidential access information such as PINs and passwords to your bank, credit card or other financial accounts. Be on your guard if someone requests that information and do not give it out over the phone or email. Also refrain from giving out your social security number or other personal information — tax identity theft goes hand in hand with scams like this. If you think you might owe money to the IRS, hang up and call the official IRS number at 1-800-829-1040. They will help you with repayment if you even owe any money at all.

3. Don’t download attachments or click on unfamiliar links in emails. If they can’t get your information over the phone, scammers may resort to tricking you through email. Even if an email looks legitimate, remember that the IRS never communicates with taxpayers via email. If you receive an email claiming to be from the IRS, don’t open any attachments included with it or click links within. Instead, forward the email to phishing@irs.gov then delete it from your inbox.

4. Harassment and threats? Probably not the IRS. Owing money to the IRS is no picnic, but they allow payment by installment and are generally able to work with people. If someone calls and immediately begins to threaten you with police action or becomes verbally abusive, you can be sure it is not a representative of the IRS. Should you receive one of these phone scam calls, contact the Treasury Inspector General for Tax Administration at 1-800-366-4484 and file a complaint with the FTC’s “Complaint Assistant” at FTC.gov.

In addition to potentially losing money, taxpayers should be vigilant about protecting themselves against identity theft during tax season as well as throughout the year. This phone scam shows that scammers are getting more and more sophisticated in their efforts, so it’s up to consumers to do what it takes to stay protected year round. Learn more about how to protect yourself at our identity theft protection blog.