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Beware the realistic IRS phone scam

(MoneyWatch) Consumers normally might be skeptical if somebody called out of the blue saying they owed back taxes and needed to pay them with a prepaid debit card or wire transfer. But, when the caller knows the last four digits of their Social Security number and the caller ID shows that the number originates from the Internal Revenue Service, some consumers think it's the real thing.

It isn't. The real Internal Revenue Service just put out a warning about this sophisticated phone scam, which is targeting consumers all across the nation. The scammers tell victims that if they don't pay a bogus tax bill immediately, they can be arrested, deported, lose their business or lose their driver's license.

Using fake names and IRS badge numbers, as well as caller identification spoofing technology, the scammers may also send victims a bogus email that mimics the IRS format and logo to support their claims. Victims who appear reluctant to pay may also get a follow-up call from the police or Department of Motor Vehicles. These calls are also "spoofed" to look real.

In reality, the IRS only initiates taxpayer contact by mail. The agency never asks for payment by anything other than check or bank transfer. All checks are made out to the US Treasury. Scammers, on the other hand, want you to pay by debit card or wire transfer because these transactions are virtually untraceable.

The IRS also does not work hand-in-hand with the police or immigration officials. If you're getting a two-agency punch, it is certain to be bogus. Pretending that a second agency is hot on your tail is aimed at getting you into a big enough panic that you'll dash out to send the money before having a chance to contact the real authorities.

What should you do?

If you get a call from someone claiming to be with the IRS asking for a payment, hang up. Again, the IRS does not call taxpayers. To report the scam, you can call the Treasury Inspector General for Tax Administration at 800-366-4484 or file a complaint with the Federal Trade Commission at

If you get an email purporting to be from the IRS, forward it to Do not open any attachments in this email. They could contain malware that can infect your computer and cause it to provide scammers with your personal information.

And if you do think you might owe federal taxes, call the IRS directly at 800-829-1040.

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