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Busting An IRS Scam-Call Center

detail of orange illuminated voicemail button on a phone
photo by Salim Fadhley

Sometimes we go weeks without a call. Sometimes the callers, angry-sounding and insistent, leave three or four messages in a day.

Those messages are always something like, “This is Agent Smith of the Internal Revenue Service. Please call the following number immediately to prevent legal enforcement action against you.”

I never speak to these people, largely because I just don’t answer the landline they call unless it is someone I know. And hardly anyone I know uses my landline anymore. For that matter, I follow the same practice with my cellphone too. If the unknown number is anyone legitimate, they will leave a message. Some of the less legitimate callers will even leave them, which brings us back to the angry threats of “Agent Smith.”

All of these IRS calls are scams. Even if such a call was not a scam, the IRS does not just send people to arrest you. Their agents are not supposed to take any enforcement action at all, in fact, without many prior contacts by regular mail or certified mail. Occasionally agents don’t quite follow the Service’s own procedures, but any real tax issues can get ironed out without the help of people in uniform showing up at anybody’s doorstep.

Oh, and by the way, no tax authority will ever ask to be paid with an iTunes gift card.

I am hardly unique in receiving these calls. The Treasury Inspector General for Tax Administration reports over 1.7 million complaints about such scams in the last three years. Such messages can land in the voicemail boxes of tax attorneys or kids, as well as people much more vulnerable to thinking they actually owe money.

The IRS is inundated with various types of fraud these days. Sometimes it comes in the form of a data breach large enough to make the news. More frequently, fraudsters take advantage of the fact the IRS allows refunds in the form of prepaid debit cards or deposits to accounts not in the taxpayer’s name to file fraudulent returns and claim the government’s money while posing as a taxpayer. Taxpayers targeted by these methods may not discover the crime until they go to file their real returns, weeks or even months later.

Phone scammers, on the other hand, are a more immediate problem from the taxpayer’s point of view. If you do not deal with taxes for a living, such calls can be intimidating and unsettling, especially if you’re unlucky enough to answer one rather than letting it go to voicemail. Even for those savvy enough to recognize such tactics as fraud, interacting with a scammer can lead them to mine a variety of other information from the call. As the IRS itself urges, “hang up immediately.” Taxpayers who are concerned they may really owe something can always contact the IRS directly at the 800 number available at irs.gov.

When you imagine such scammers, you may picture a roomful of con men going through 2016’s equivalent of the White Pages. But such fraud actually operates on a more industrial scale. The Wall Street Journal recently reported that authorities in India arrested 70 people under allegations that they managed hundreds of workers at nine call centers, all devoted to impersonating IRS agents and defrauding Americans. The police suggested that there may be additional call centers in the area engaging in such activities.

Such scams a huge problem for the IRS and, increasingly, for state tax agencies. Big investments in automation are undermined when taxpayers either shy away from electronic filing or are forced to abandon it because the tax authorities fail to keep their systems secure. Vast quantities of personal data are floating around cyberspace, making it easy for tech-savvy scammers to convincingly impersonate honest individuals. And the entire U.S. income tax system rests on voluntary compliance, including the ability to get taxpayers – happy about it or (usually) not – to work informally with revenue agents to resolve issues. This becomes increasingly difficult when taxpayers are unable to distinguish between a real agent and somebody who might be working in a boiler room in Mumbai.

Give credit to the Indian authorities for at least trying to crack down on these scams. It’s a matter of self-interest, since the credibility of the entire Indian outsourcing industry is threatened when fraudsters establish industrial-scale scam-call centers. But enforcement is also a form of international cooperation that we seldom, if ever, hear about from other hotbeds of online crime, notably Russia and China.

As for me, I’ll keep ignoring those messages from the fellow calling himself Agent Smith. Any real revenue agents know where to find me.

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