Listening to tax scammers in action

April 18 is the tax filing deadline in the United States this year. The months leading up to the tax deadline can be a trying time for some, having to navigate among complicated tax forms and the byzantine tax rules. For those who owe IRS money, there may be the worry of finding the funds to pay taxes. The busy tax filing season can surely test anyone’s number skills. Of course, one can always use tax software or hire a tax preparer for help. It turns out that we should also be on the alert for tax related potential hazards, e.g. tax scams on the phone. For this kind of hazard, tax software or hired tax preparer will be of no help. Being good with numbers is an important skill in the tax season. Being informed and staying alert is important too.

Ever wonder what a tax phone scam sounds like? This article from npr.org has a recording of a real life phone scam. The recording is between an active fraud ring and a presumed victim who in reality is a researcher for Pindrop Security, an Atlanta-based company that investigates phone fraud. The original recording is over an hour long, several segments of which are posted in this article.

In the first recording segment, the “IRS” man told “Emma Lauder”, the covert Pindrop researcher that she owed IRS $1986.73 due to miscalculation of taxes from 2009 to 2014. To give the situation a menacing tone, the supposedly IRS many told Emma that local law enforcement personnel with an arrest warrant will be visiting her house any minute now. Her properties will be seized and she will face federal imprisonment of up to five years.

Of course, there will be a way out. The way out is through cash! Not through a check or credit card since this is a federal case (this is said at the end of the first recording). The United States federal government is a cash-only organization! The only channel to send cash to the federal government is either Western Union or MoneyGram!

What the scammer said on the phone is amazing and incredulous. Think about it. The size of the budget in 2016 for the United States federal government is over $18 trillion. So the scammer is saying that the federal government can only take cash and the cash can only be sent through one of two channels? If that is the case, Western Union and MoneyGram are the most profitable money senders in the entire planet!

Emma is also told to make the payment to a man named Gabriel Porter in Boston. Is Gabriel Porter the Secretary of Treasury of the United States?

As incredulous as these schemes seem to be, they are effective enough that over 5,000 victims have forked over $26.5 million to such scammers since October 2013, according to this tax scam alert from IRS.

If anyone receives such phone call or email, report such calls to IRS immediately (call IRS at 800-829-1040). Remember IRS will not call anyone for delinquent tax bills without first mailing a tax bill (through the postal service). Here’s several bullet points from the alert that are worth repeating.

IRS will never:

  • Call to demand immediate payment, nor will the agency call about taxes owed without first having mailed you a bill.
  • Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
  • Require you to use a specific payment method for your taxes, such as a prepaid debit card.
  • Ask for credit or debit card numbers over the phone.
  • Threaten to bring in local police or other law-enforcement groups to have you arrested for not paying.

The mere fact that someone who claims to be from IRS calling you about taxes you owed is enough of a red flag. But those scammers prey on the fear among the potential victims. This is why the recordings posted in the npr article can be a very effective public service announcement. I urge everyone to listen to the recordings. This recording (in several segments) is like an anatomy of a tax scam. You can hear the scare tactics. You can hear for yourself how the scam works. You hear a vivid telling of all the absurd details. Like the scammer telling the victim not to tell anyone. Like you can only wire money to the federal government through Western Union or MoneyGram. They say a picture is worth a thousand words. In this case a phone recording definitely makes the scam feel real.

At the end, the conversation between the scammers and the victim turned surreal. Emma, the covert Pindrop researcher, asked for a receipt of the payment. Pressing for an email receipt of the payment, she was given a confirmation number instead. The letters in the confirmation numbers form a slang term for the female genital. But the insult is not clear at first since it is a foreign slang. As for the actual receipt, she was told to look into her toilet. This is downright creepy and abusive.

The recording in this npr article is a good tool to publicize such fraud schemes. Tax scams can happen any time of year, not just at tax time. Here’s more information from IRS on tax scams.

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