The phone rings. A stern voice on the other end of the line says the following: "This is Agent Harris with the Internal Revenue Service. You owe us $112,908 in back taxes and if we cannot resolve this now, we will have armed agents at your door within an hour and they will arrest you."
Who would fall for this? Paul Herman, a CPA based in White Plains, N.Y., said a client of his got a call very similar to that and, before it was over, she had sent off "five figures," said Herman, via MoneyGram, a wire transfer service.
In Cedar Grove, N.J., so many residents have recently been getting calls from the "IRS" that the police department just issued an alert.
In Chicago, the Better Business Bureau said that IRS scams have doubled in the past month. It added that callers demand immediate payment and threaten that if it is not received, the victim will be arrested or deported.
Those cities aren't alone. From Tulsa to Athens, Ga., police are warning residents that suddenly IRS related scams are epidemic.
In Washington, D.C., the US Treasury Inspector General for Tax Administration has issued a series of alerts about IRS related scams and, in particular, it has warned that the IRS does not ask for payment via iTunes gift cards, a payment vehicle that lately has been gaining favor with scamsters.
Don't snicker about iTunes. For many of us, the letters "IRS" send us into paralysis. "When we hear IRS, our brain freezes," said Don Bush, a vice president at fraud detection company Kount.
Scamsters know that, and they bank on it. The sheer number of IRS related alerts around the country right now says that many of us are falling victim. Expect to see more, said Stephen Cobb, a senior security researcher at ESET. "If a particular scam works, it will take off," he added.