Scammers are targeting college students with a new twist on a classic con. Con artists impersonate IRS agents and demand that students pay a fictional tax … or face arrest.
How the Scam Works:
Your phone rings, and the Caller ID shows it’s from the IRS. When you answer, the caller claims to be an IRS agent. He or she says that you failed to pay your “federal student tax.” Now, insists the caller, you are wanted for tax evasion and a warrant will be issued for your arrest.
However, the “agent” can clear your name if you pay the tax immediately. You need to go to a nearby store and purchase a prepaid debit card, money order, or even a gift card and read the numbers to the “agent.” If you do so, the “agent” will steal the money and disappear.
IRS impostors often go to great lengths to appear realistic. Victims report that scammers use Caller ID spoofing technology to appear to be calling from IRS headquarters in Washington, DC. Con artists sometimes follow up scam calls with an email, which use the IRS logo, colors and official-sounding language. It’s important for students to be aware of their financial aid rights and responsibilities, as well as on the lookout for this new twist on an old con.
How to Spot an IRS Impostor Scam:
Be wary if you are being asked to act immediately. Scammers typically try to push you into action before you have had time to think. The IRS will give you the chance to question or appeal what you owe.
The IRS doesn’t call, text, or email first. The IRS won’t call about payment or overdue taxes unless they have first contacted you by letter.
Don’t wire money, use a prepaid debit card or pay by gift card. Scammers often pressure people into these forms of payment. It’s like sending cash: once it’s gone, you can’t trace it. The IRS says it will never demand immediate payment, require a specific form of payment, or ask for credit card or debit card numbers over the phone.
If you owe taxes or you think you might, contact the IRS at 800-829-1040 or irs.gov. IRS employees at that line can help you with a payment issue, if there is an issue.
Learn more about common tax scams on the IRS website. To report a scam, go to BBB Scam Tracker (bbb.org/scamtracker).
Note that, although this particular scam is based in the U.S., similar scams mimicking the tax agency often appear in other countries. Canadian Revenue Agency scams are huge in Canada.
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Information for this story was provided by the Better Business Bureau.