WASHINGTON —?A sophisticated IRS impostor scam has become so widespread that ruthless criminals even tried to bilk the top US tax fraud investigator out of money.
“I myself received one of these calls at my home on a Saturday,” Timothy Camus, deputy Treasury inspector general for tax administration, told a Senate panel Thursday.
The scammers have amped up their attempts during this tax season, preying on Americans’ fear of the IRS and bilking innocent victims out of millions at an alarming rate, Camus warned the Senate Finance Committee.
IRS agent impersonators this year become “the largest and most pervasive impersonation scam,” costing Americans $15.5 million.
New Yorkers accounted for $1.4 million —?second-highest of any state behind California, according to the inspector general.
The scam seems to have originated abroad as an emerging form of organized crime, said Sen. Ron Wyden (D-Ore.).
Here’s how it works: The caller identifies himself as an IRS agent, provides a fake IRS badge number and tells the victim he or she owes a specific amount of money to the US Treasury. The scammer may know personal information —?like four digits of a Social Security number —?and threaten criminal penalties if the victims don’t pay immediately.
The criminals require payment through a prepaid debit card and repeatedly harass victims, threatening jail, deportation or loss of driver’s licenses.
Victims are “terrified,” said Ellen Klem of the Oregon Justice Department, recalling a case of one victim named Diane who handed over more than $15,000 after being threatened with a fine for $25,000, 18 months in prison and arrest later that day if she didn’t pay a phony tax bill.
“She pleaded, she begged,” Klem said of Diane, who ultimately “made the only choice she thought she had.”
To date, the Treasury inspector general has received more than 366,000 complaints —?on average between 9,000 and 12,000 reports a week.
As of March 9, more than 3,000 people fell victim and paid a total of $15.5 million. The average loss is $5,000, Camus said.
“My gosh, I think a lot of people are going to be very surprised at how this is ballooning in our country,” said Sen. Orrin Hatch (R-Utah), who chaired the hearing.
“We have to stop this.”
Federal law enforcement has a multi-agency investigation into the scammers. Until they are caught, authorities are advising victims to just hang up because the IRS does not cold-call people about tax payments.
As for the schemer who threatened the deputy inspector general, Camus said, he left him with a warning before hanging up: “Your day will come.”