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Fred Dunkley

Fred Dunkley

Writer, Safehaven.com

Fred Dunkley is a tech analyst, writer, and seasoned investor. Fred has years of experience covering global markets and geopolitics. 

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Fraudsters Target Taxpayers In Million-Dollar Scam

Tax Fraud

Back in the 2016 tax season, there was a spate of fraudulent tax scams that unnerved the entire nation. The IRS reported a massive 400 percent increase in tax fraud, mostly perpetrated by a group of impersonators who used spoof TurboTax online software to steal user credentials through elaborate email phishing schemes.

Well, the tax scam menace has reared its ugly head once again, only this time it’s much bigger, more elaborate and more daring than ever before. The Justice Department has announced that it has successfully uncovered a massive telefraud scam that Attorney General Jeff Sessions has termed as the "first-ever large scale, multi-jurisdiction prosecution targeting the India call-center scam industry."

A total of 56 individuals and five Indian companies have already been charged in connection with the scheme of which 22 have been ordered to pay $8.97 million in restitution to the victims while another 21 were ordered to pay more than $72.9 million in judgments as a punishment for their crimes.

Extortion ring

The tax extortion ring was masterminded by criminals in the U.S. and India over a period of four years with 15,000 victims in the U.S. losing hundreds of millions of dollars and another 50,000 individuals having their personal data stolen. Fraudulent calls were placed by people impersonating Internal Revenue Service (IRS) of immigration officials who threatened arrest, deportation or fines if the victims failed to immediately pay their debts via wire transfers or prepaid cards. Related: Smart Money Moves Into Risky Territory

The shock and awe tactics seem to target vulnerable Americans including older people and immigrants, with the stolen cash routed through call centers to the ringleaders located in eight states in the U.S. An 85-year old woman in San Diego parted with $12,300 after being threatened with arrest for tax evasion by people claiming to be IRS employees.

A Chicago man paid $5,070 after being threatened with arrest and deportation by supposed immigration authorities.

A New Hampshire woman was told to pay $3,980 to the IRS in payment cards by a caller with caller ID “U.S. Government.”

Nobody is immune though, with none other than the Connecticut state tax commissioner and a lawyer for the Federal Trade Commission having received such calls in recent times.

Be on the lookout

The IRS has posted repeated warnings about tax phone frauds where impostors pretending to be IRS agents call victims claiming that they owe back taxes then threaten arrest or legal action unless quick payment is made. The criminals sometimes ask the individual to do a wire transfer but more frequently they direct them to obtain a prepaid money card at a retailer then provide the number to the caller. The callers are usually aggressive, relentless and ruthless. The also strive to appear authentic by using robocalling technology that displays “I.R.S.” on your caller identification screen. They may provide your social security number and fake IRS badges sometimes. In some cases, the victim receives a series of follow-up calls by people pretending to be the police or prosecutors.

Related; These Billion-Dollar Companies Started As Side Gigs

The IRS lists telefraud scams among a dozen tax scams that consumers should watch out for. The simplest and most effective advice to avoid becoming a victim is: ignore any calls from people purporting to be IRS agents. The first time you hear from the IRS is never through a phone call or email but rather through written correspondence through the United States mail usually involving countless notice streams in a highly formalized process.

The IRS typically initiates contact through a CP2000 notice that informs the recipient that the IRS has information that does not match their tax returns. Payments are requested for through organized and secure platform not an iTunes gift card.

If you receive any such dubious calls, file a report via the Treasury Website or call the Treasury Inspector General for Tax Administration at 1-800-366-4484. You can also file a complaint with the Federal Trade Commission.

By Fred Dunkley for Safehaven.com

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