Hang Up! IRS Fakes, Scams Abound

Melanie Conley with Sergeant Shawn Kilgore at the Sykesville Police Department.

by Linda L. Esterson, photography by Bill Ryan

Melanie Conley drove home early from work one late September day. A cell phone call would not only make her late for an appointment, but it would prove traumatic.

Conley had noticed an unfamiliar phone number several times on her cell during the day, but failed to answer as is her practice during work hours. It was only after retrieving an urgent voicemail that she opted to return the call.

The caller was from IRS Headquarters concerning a tax issue and a pending lawsuit against her. Conley did not find the call odd as she had been through a difficult year dealing with tax liability from her family business. In fact, three weeks earlier, she received a letter from the IRS stating she owed additional taxes.

The representative instructed her to be silent as he was required to read the affidavit without interruption. The affidavit asserted charges of fraud, tax evasion, eluding authorities and another charge which Conley failed to hear.

“I blanked out by that point,” she says.

Trying to control her sobs, the caller continually requested silence. When she failed to stop, he told her he had to begin again and did.

The charges included an odd fee amount over $5,600, down to the penny.

“I have every right to cry,” Conley told him. “You are accusing me of these things.”

After several failed attempts at reading the full affidavit, the call was transferred to a supervisor. Conley managed to contain herself, and after the statement she asked a few questions: why was I not notified? How much time do I have to rectify this? How do I go about it?

She was told she had an hour to get the money to the IRS or there would be a warrant out for her arrest, and her employer would be notified. She cried harder. The representative named three dates that delivery of certified letters was attempted to her home and read her address. He then blamed her accountant for “getting her into this mess. The federal government never told you to hire an accountant. He messed it up.”

Conley insisted she needed time to contact her attorney and accountant but the caller stipulated she had less than an hour by that point. She went on the offensive, telling him she was driving to the nearby police station.

“If you go there, ma’am, you will be arrested on the spot because there’s a warrant out for your arrest.”

She pulled into the Sykesville Police Department station and as luck would have it Sergeant Shawn Kilgore was outside. He recalls seeing Conley walking toward him, hysterically crying.

“I thought someone died or it was something serious,” he says.

When she detailed the call, he instructed her to hang up.

He took the phone from her, only to hear the person on the other end giving her instruction to drive to the police station. Although he identified himself, the representative didn’t hear and continued by asking for a fax number to send the arrest warrant.

“Sir, this is the police,” he noted. The caller finally hung up, 38 minutes after first conversing with Conley.

Since the fall of 2013, the U.S. Treasury Inspector General for Tax Administration (TIGTA) has been tracking and investigating this scam, through which criminals impersonate IRS employees to extort money from unsuspecting individuals. According to the TIGTA, this is the largest, most pervasive telephone impersonation scam in the agency’s history. To date, more than 1.8 million people have reported to TIGTA that they have received an impersonation call. More than 9,600 victims reported that they paid the criminal impersonators a total amount that exceeds $50 million, including a victim in California who paid scammers $136,000.

In late October, the U.S. Department of Justice obtained an indictment on 56 individuals, located in the United States and at five call centers located in India. This is the largest single domestic law enforcement action to date involving this scam. Despite this significant legal action, Inspector General George encouraged all members of the public to keep their guard up, as scammers like these are still in the business of cheating people.

Inspector General J. Russell George, in a press release announcing the indictment, warned members of the public, “We are concerned that scam and impersonation calls may continue, so it is important that if you receive a call from someone out of the blue who claims to represent the IRS or Treasury, and demands immediate payment to avoid arrest or a lawsuit, it is a scam, and the best thing to do is to just hang up the phone and report the call to us.” Individuals are encouraged to report suspicious calls and activity through the TIGTA website at www.treasury.gov/tigta/contact_report_scam.shtml.  

Federal Trade Commission (FTC) statistics prove staggering. In 2015, more than 1.2 million fraud complaints were filed in the U.S. with more than $765.2 million paid to scammers. According to the FTC Consumer Sentinel Network Data Book, published in February 2016, 61 percent of payments in 2015 were made by wire transfer. More than 75 percent of the 485,000 fraud victims were contacted by telephone. More than 57 percent were over age 50 and more than 37 percent were over age 60. Maryland ranks 9th out of all 50 states for fraud and other complaints and 4th for identity theft.

According to Sgt. Kilgore, the call to Conley wasn’t the first in Carroll County to be contacted as part of an IRS scam, and she won’t be the last. He recalls a similar incident involving a government employee who was conned out of about $8,000 through gift card purchases at a local grocery store.

“They called him again the next day and he went to the store to purchase more cards,” Sgt. Kilgore stated. It was only when the store cashier told him he was being scammed that he realized it was true.

A TIGTA update in June indicated scammers were directing victims to purchase gift cards to make the “tax payments” in the form of iTunes, as well as prepaid cards from Green Dot, MoneyPak, Reloadit, and other companies, and directing payments via Western Union, MoneyGram, bank wire transfers, and bank deposits be made into another person’s account. Such attempts should be reported.

Common sense and thinking through the caller’s request can help avoid scamming situations, Sgt. Kilgore says.

“Don’t entertain phone calls because the IRS doesn’t work that way,” he says. “The IRS won’t instruct you to go to the grocery store and buy gift cards.”

Additionally, the IRS wouldn’t threaten with an arrest warrant from the local police district. The government entity has its own law enforcement agency.

“It’s absolutely a scam. The IRS doesn’t work that way. If you didn’t pay your taxes, you will get a letter in the mail. They won’t call with a foreign accent and demand you go to the grocery store and buy gift cards.”

If unsure, call the local police department to check if an arrest warrant exists. Kilgore is certain that unless the resident is Bernie Madoff, there would not be an arrest warrant based on a phone call.

Kilgore suggests having taxes done through a reputable agent, accountant, H&R Block or the AARP for those over 50.

Additionally, refrain from providing personal information like social security number, date of birth, bank account and credit card numbers and passwords over the phone.

“A credit card company won’t ask for a three digit code over the phone because they already know it,” Kilgore explains. “Likely this is somebody trying to take your information and use it to get access.”

Be careful of people calling to verify information as well as they likely found information online or paid for access to it.

“There is a myriad of information available to bad guys,” he says. “You have given them the ability to buy a brand new car because they have your information.”

Kilgore was able to bring Conley inside the police station and calm her down.

“It made sense with my life situation and they caught me at a vulnerable time,” she says. “I was the perfect victim.”