Tax Impersonation Scams

No matter which country you live in, the story is always the same. 

The phone rings and the person on the other end says he’s calling from the Internal Revenue Service (IRS) or state income tax authority or even from a county or municipal government.  If you’re in Britain he’ll claim, of course, to be from HM Revenue & Customs (HMRC).  In Australia from the Australian Taxation Office (ATO), in Canada it’s the Canada Revenue Agency (CRA). 

Wherever you live and whatever the relevant tax collection authority is called, the voice on the other end of the phone will inform you that a review of your file has found that you owe the government a lot of money.  Back taxes you never paid, they’ll claim, plus interest.  And if you don’t pay up within a day or two agents will be sent to your home to arrest you. 

They’ll be stern but polite and will even give you their names (all fake) and employee numbers (also fake).  That makes it sound even more convincing.   And to illustrate how heartless these scammers are and their technological sophistication, some are known to have used video relay services (VRS) to try to target the deaf and hard of hearing. 

Not expecting such news, fearful of being arrested and then having to pay for a lawyer to get you out of jail, your instinct will be to agree to cough up the money.  But if you agree, the caller will spring another surprise.  Because of your arrears, you will not be allowed to pay by credit card or send a personal check.  You can only pay by wire transfer.  You’re then given the bank account number into which the money must be deposited.  So, the next morning you go to your bank and arrange for the transfer.  The money is debited from your personal bank account and presto, the wire is sent. 

An alternative that provides an excellent chance for the scammer to avoid detection is to demand payment using a gift card (yes, you read that right) or pre-paid debit card.  

But it’s all a scam.  And if it’s a wire transfer, gift card or pre-paid debit card it can be impossible to trace.  The bank account may be registered under an alias.  The bank is also probably located in a foreign country.  If they don’t make a mistake, scammers can literally walk away with your money.  Luckily, some of them do make mistakes.

In 2018, 21 conspirators were sentenced to up to 20 years imprisonment each for conspiracy in a massive IRS scam that was active between 2013 and 2016.  More than 15,000 people lost hundreds of millions of dollars in the scam.  The money they were intimidated into sending the scammers was laundered through call centers in India and then re-routed back to the ringleaders in eight different states.  The number of victims could have been significantly higher, since the scammers were caught with the personal information of more than 50,000 people.

This Is a Global Scam, and Taxpayers in Every Country Can Be Hit 

From April 2017 to March 2018, HMRC received 771,227 complaints about phishing emails or SMS messages.  A total of 14,631 malicious websites were targeted for closure as a result (which works out to more than 40 every day).  In November 2018, tax scammers fleeced over AU$800,000 from Australian taxpayers.  More than 37,000 phishing attempts were reported that month alone to the ATO.  And from 2013 to 2018, Canadians lost over CDN$10 million to tax scammers.  During those six years some 60,000 phone calls by tax scammers were reported to the CRA.

For the record, the IRS will never call any taxpayer to demand payment of back taxes.  They will only contact you by mail.  Any phone call you get is, by definition, a scam. 

If you think you’ve been the victim of a tax impersonation scam, contact the fund recovery experts at MyChargeBack