IRS Impersonators Have New Tricks

Scam artists, posing as IRS agents, who contact innocent taxpayers out of the blue and demand payment on tax bills that don’t exist are getting more crafty and casting a bigger net these days. For at least the past few years now, the IRS has regularly published updated warnings each time they perceive a new wrinkle, or if enough time has passed since the prior warning.

This month, the IRS published a scam warning that identifies a couple trends that suggest these tax criminals are taking the time to do some homework rather than calling completely unscripted. For example, one tactic is to alter your caller ID so it appears the call is coming from a legitimate government agency.  Scammers have always posed as official government representatives by giving false names, titles, and badge numbers, but now they are more frequently adding this new layer of “authenticity” to the call.

The ultimate goal of IRS phone scam artists is to get the victim to make a payment over the phone and/or provide sensitive information like your name, address, and social security number. If they are successful in obtaining a payment over the phone, they are now asking victims to mail proof of payment to an actual IRS office nearby. Taxpayers choosing to verify the address can look it up in a Google search and see that it is the correct address to their local service center, which lends a sense of legitimacy to the whole interaction. Of course, anyone with half a brain would know that providing the address to an IRS office that is posted on the internet for anyone to see means absolutely nothing.

In this month’s published warning, the IRS states that these scam artists use angry voices to strike fear into their victims and pressure their victims into making rash decisions. Then the IRS lists a few things that they will “never” do, so it will be easy to distinguish between scammers and true IRS representatives:

  1. Angrily demand payment over the phone
  2. Call prior to sending a bill for overdue taxes
  3. Threaten arrest for non-payment of taxes
  4. Demand payment without the opportunity to appeal the amount owed
  5. Require a specific payment method
  6. Ask for credit or debit card numbers over the phone

#1 on this list is a little strange to me because anger, and the detecting of anger in someone’s voice, is a subjective thing. Isn’t it? I have heard demands for payment in voices that could reasonably be characterized as “angry.”  I have also had IRS representatives tell me that they require an “auto debit” payment arrangement in order to approve an installment agreement, hence somewhat of a violation of #5.  However, in my experience, IRS representatives usually do a pretty good job complying with this list.

Mastermind of IRS Phone Scam Gets 14 Year Prison Sentence

You would have to be living under a rock if you’re not aware of the pervasive IRS impersonation phone scams going around.  These scammers prey on the least-informed, most vulnerable people in society, convincing them that the IRS is on the brink of throwing them into prison for unpaid taxes when, in many cases, no taxes are owed.  Now at least one of the masterminds behind this, Sahil Patel (36), is going to be put away for 14 years.  Patel was sentenced a couple days ago in a U.S. District Court in New York for conspiring to extort, to impersonate government officials, and to commit wire fraud.

The government considers Patel one of the ringleaders in a scam that duped nearly 4,000 people out of a combined $20 million over the past two years.  However, this criminal group is obviously run by more than just Patel as the phone calls have not stopped since his conviction.

Maybe 14 years seems like a long time to you for a crime that doesn’t involve taking a life, but this is what the district judge had to say about it:

The nature of this crime robbed people of their identities and their money in a way that causes people to fee that they have been almost destroyed.

He definitely wanted to “ensure adequate deterrence.”  Plus I don’t think it helped that Patel came across as an “unfriendly” witness.  He reportedly made some sexist comments about the women he hired to do the dirty work and how they were ignorant and gullible.  I know that 14 years seems like a heavy penalty, and you can’t really expect a higher level of severity, but I wonder if this will really deter the co-conspirators who appear to be keeping the scheme operational.  The rewards are so incredibly high for them and, at this point at least, the risks seem to be just low enough.

We can increase the risk by finding more of these guys, and I think the IRS, in cooperation with law enforcement, is doing the best they can.  We can reduce the reward by informing the public — and this is where I think they can improve.  I started this article by saying that one would have to be living under a rock to not be aware of these phone scams, but I don’t know if that is true.  As a tax attorney, I hear about this kind of thing all the time because I am dialed into tax news and events.  But is the average taxpayer getting the message?  I think IRS public service messages are focused on tax professionals.  Maybe there should be a broader kind of outreach through TV and radio.  I suppose there is a reason why they haven’t gone there; maybe they don’t want to freak everyone out.