Feds Warn About Latest $1 Million IRS Phone Scam

A taxpayer, already nervous about a questionable deduction as he prepares his tax return, gets a phone call. The caller says he is from the Internal Revenue Service, the taxpayer owes back taxes, and must pay immediately via a pre-paid debit card or wire transfer.

The phone call is a scam. The caller is not from the IRS. The IRS typically contacts taxpayers by mail and it never demands immediate payment.

So far this year, according to authorities, scammers have ripped off taxpayers to the tune of about a million dollars.

According to CNNMoney, the office of the IRS inspector general said, "The scammers threaten those who refuse to pay with arrest, deportation, or loss of a business or driver's license."

The IRS said it had received more than 20,000 reports about the scam so far this year alone.

Treasury inspector general for tax administration, J. Russell George, said it was, "the largest scam of its kind that we have ever seen."

According to the IRS, people who receive such calls should call the IRS at 800-366-4484 and report the incident. They should not, under any circumstance, pay up.

The “you owe back taxes” phone scam was the latest in a series of tax frauds about which the IRS has warned taxpayers this year. Earlier the agency published its “dirty dozen” list that warned of phishing emails, preparer fraud, and even claims of "free money."

Related: IRS Says Watch Out For These Tax Scams

Other phone scams include people calling who claim to be from the DMV or police. Taxpayers who think they actually owe back taxes were urged to call the IRS at 800-829-1040 and speak to someone about their situation.

The IRS list also include various cons designed to commit identity theft in which scammers seek to obtain your Social Security number and other personal information. The IRS covered the subject of identity theft in a special section on IRS.gov.

Fake charities also pop up around tax time – when people are looking for deductions for next year. It’s best to give to charities you know and trust. If you are unsure about a charity, the IRS website has a search feature.

Finally, there are those who  argue you do not have to pay taxes because they are unconstitutional. You might even believe that one, but best wishes finding a court that agrees.