Hey there, scam warriors! Welcome to the IRS Scam Blog-post. In the previous blog, we understood what is a government imposter scam and in how many forms it can be executed. Today we are diving deep into its first category, which is the Internal Revenue Service scam. But first, let’s understand what the IRS is and why people fear it.
What is the IRS and why it intimidates people?
The IRS, or Internal Revenue Service, is the United States government agency responsible for administering and enforcing the nation’s tax laws. Its primary role is to collect taxes and ensure compliance with tax regulations. The IRS oversees various aspects of the tax system, including processing tax returns, issuing refunds, conducting audits, and enforcing tax laws through penalties and fines for non-compliance. Additionally, the IRS provides taxpayer assistance, educates the public about tax laws, and implements tax policies set by Congress. It plays a crucial role in funding government programs and services by collecting revenue through taxation. As a government enforcement agency, the Internal Revenue Service can intimidate people for several reasons.
Firstly, it holds significant authority and power to enforce tax laws and regulations. This includes the ability to conduct audits, impose fines and penalties, and even pursue criminal charges for tax evasion or fraud. The prospect of facing an audit or investigation by the IRS can be daunting for individuals and businesses alike.
Secondly, the complexity of tax laws and regulations adds to the intimidation factor. Navigating the intricacies of the U.S. tax code can be challenging, and many taxpayers fear making mistakes on their tax returns that could lead to scrutiny or penalties from the IRS.
Furthermore, the IRS has access to a vast amount of financial information about taxpayers, which can feel intrusive or invasive to personal privacy. The agency’s authority to collect and analyze this information can contribute to feelings of unease or apprehension among taxpayers.
Overall, the combination of the IRS’s enforcement powers, the complexity of tax laws, and concerns about privacy and fairness can make the agency appear intimidating to individuals and businesses. However, it’s essential to remember that the IRS’s primary goal is to ensure compliance with tax laws and maintain the integrity of the tax system, rather than to intimidate taxpayers.
What is an IRS scam?
IRS scams represent a nefarious form of government imposter scam, leveraging the trust and authority associated with the Internal Revenue Service (IRS) to intimidate individuals through deceptive tactics and extort money. These scams often prey on people’s fear of the IRS’s enforcement powers and the consequences of non-compliance with tax laws. Scammers impersonate IRS officials, employing intimidation tactics such as threatening arrest, legal action, or the suspension of Social Security numbers to coerce victims into compliance. They exploit the perceived legitimacy of the IRS to instill fear, and pressure victims into making immediate payments using methods like cash deposits, prepaid gift cards, or cryptocurrency.
The effectiveness of IRS scams is notable, with scammers successfully defrauding individuals and businesses out of significant sums of money. These scams have been pervasive for several years, but their prevalence tends to increase during tax season when individuals are more likely to be concerned about their tax obligations. The sophistication of scammers’ tactics, combined with the widespread fear of the IRS, has made these scams alarmingly successful. Despite efforts by law enforcement agencies and consumer advocacy groups to raise awareness and combat IRS scams, many individuals continue to fall victim to these fraudulent schemes.
Execution of IRS scam.
Now once we have the basic knowledge of the IRS and how its name, trust value, and intimidation are used to operate a scam. It is time to understand the on-ground execution of this scam. In this section, we will understand how this scam is initiated using emails, phone calls, and text messages, what script scammers follow, what payment methods they use to extort money from victims, and most importantly do they stop after this?
Step 1: The beginning.
The IRS scam often begins with a voice message left on the phone, or an email or text message. Victims usually get a voice message on their phone as a final notification call. This voice message is mostly in a robotic voice generated using text-to-speech software and is designed to create a sense of urgency and fear in the victim’s mind. Here is an example of one such voicemail:
“Hello, this is Officer Smith calling from the Internal Revenue Service. It is imperative that you return my call immediately at 1800-359-XXXX. This is your final notice regarding an urgent matter related to your taxes. We have detected discrepancies in your tax returns, and failure to address this issue promptly may result in serious consequences. There is a pending lawsuit against you, and you may face arrest or other legal action if you do not cooperate. To avoid further escalation, you must call us back within 24 hours to discuss resolving this matter. Do not disregard this message. Ignoring it will be seen as a deliberate attempt to evade taxes. Again, call us back immediately at 1800-359-XXXX. Thank you.”
This same message can be sent through an email or a text message after minor alterations. These kinds of messages are always sent in bulk so that a maximum number of callbacks can be generated to start the process. Another benefit of doing so is to filter data. Out of thousands of people receiving these messages, people who call back are the ones who have fear of the IRS and are scared about the things that can go wrong. These people are always the ideal targets of scammers.
Step 2: The script
Once the callbacks are generated, the scammers have to be ready to receive them and convert them into a sale call. This cannot be done without following a proper call structure and to do so they follow a script. Here is an example:
Scammer: “Hello, this is Officer Johnson from the Internal Revenue Service. How can I assist you today?”
Victim: “Um, hi. I received a voicemail from someone claiming to be from the IRS, and they said I owe back taxes. Can you help me with this?”
Scammer: Yes, certainly. Can you please provide me with your first and last name and the last 4 of your socials so I can pull up your file and verify your identity?”
Victim: “Okay, it’s [John Thomas] and the last 4 of my Social Security number is [3659].”
Scammer: “Thank you for providing that information. Now, let me check your file… Yes, I see here that there are indeed discrepancies in your tax returns for the past few years. You owe a significant amount back to the IRS, totaling $6759. Failure to resolve this matter immediately could result in serious consequences, including arrest and legal action. Are you aware of these outstanding taxes?”
Victim: No, certainly not. I would have paid them If I would have known.
Scammer: Well, this is a violation of the following tax laws:
- Violation of Tax regulation.
- Violation of internal revenue code.
- Theft by deception
- Willful misrepresentation of information to the IRS.
Due to these violations, the government has decided to freeze and confiscate your accounts and take legal action against you starting with your arrest. Currently, you are a primary suspect in this tax evasion case.
This panics the victims and to avoid legal consequences they agree to pay the asked amount. In case of a lack of funds with victims, scammers provide a one-time settlement offer that is less than the asked amount and is convenient for the victim to pay immediately.
Step 3: The payment method.
Once the victim agrees to pay, the scammers have to provide them with a payment method. They need to ensure that the payment method checks two conditions, First, it should be almost untraceable, and second, it should be easily redeemable. These are mostly gift cards, cash deposits in bank accounts created with fake IDs and cryptocurrencies.
To make it sound legitimate and authentic scammers give these payment methods different names that sound trustworthy like EFTPS (Electronic federal tax payment system), Tax payment vouchers, and government bonds. All these names have no significance but they sound convincing and work for them.
Step 4: Keep milking
Once the victim makes a payment of the agreed amount, It’s a sale for the scammer. It’s unethical and illegal but still a sale. So, if a customer is buying why not sell more? One universal truth that applies to all kinds of scammers is that all of them are money-hungry people. They would never let an opportunity like this go in vain. So, they sell another story, a refundable security deposit of $5000 which is required to cancel the charges. If that is paid, then some other story and then some other until the victim gets bankrupt or stops talking and hangs up the phone.
Scam warriors, it is important to know that due to a lack of knowledge and awareness, many people including highly educated professionals like doctors, engineers, lawyers, and teachers have lost their life savings in this scam. People have emptied years of savings, and stock investments, and even sold their cars and jewelry to pay for IRS scams. We are on a mission to educate people about online scams and help people protect their hard-earned money and peace of mind from online scam attempts.
Share this article with your friends and family to spread awareness and protect them from IRS scams. Check out “The Scam Protector” Book on Amazon which is written to transform its readers into scam warriors and is free for all Kindle Unlimited users. In the next blog, we will dive deep into the second kind of government imposter scam which is the Social Security scam. Till then enjoy tech and stay safe.
