Beware! IRS Scam Shifted to Foreign Nationals

I got a call last week from a professional client about an urgent situation.  In a panicky voice, he explained that his girl friend just received phone calls from various law enforcement agencies advising her that an arrest warrant had been issued against her because she owed IRS back taxes. In fact, as we spoke, she was getting money from the bank to pay her debt to avoid jail time.  

"Hold it," I immediately advised my client.  I was 99.9% certain that it was a scam.  I knew for sure not only because the scam had been well-publicized, or because I believed in my client and his girl friend's integrity.  I was certain it was a scam because it is just not the way the police work.  If law enforcement officers want to arrest a person, they will find the person and execute the arrest warrant in person.  They are not going to spend 30 minutes on the phone to warn you that they are coming to get you unless you pay up.  

This scam is an international operation involving sophisticated internet phishing technologies.  The callers are apparently professional con-artists.  Although reportedly operating out of India, these callers talk and sound like Americans.  They are so convincing on the phone that people of all walks including well-educated professionals and a former NFL player fell for it.  They threatened the victims that if they don't pay up immediately, they would go to jail, lose their home, appear on the front page of newspapers, etc.  Payments range between $5,000 to $500,000 were demanded.

The scariest part of these calls is that the caller seems to know a lot of personal and financial information about the target victim such as names, addresses, phone numbers, visa status, and even social security numbers.  Invoking such personal information makes these scammers even more convincing on the phone.  Apparently, identify theft is an important component of these phone scams.

Despite the fact that the scam has been reported by the mainstream media, (e.g., CNN: http://www.cnn.com/2015/03/13/us/irs-scam/) some people still have not heard about it.  As more people become aware of this fraudulent scheme, the scammers have shifted their attention to the less suspecting temporary visitors in the U.S. such as international students and temporary workers. These temporary visitors naturally become easy targets because of their immigration status (and the recent anti-immigration rhetoric) and their unfamiliarity of the complex U.S. tax laws.  

Fortunately, my client and his friend talked to me before they forked over any money.  With their permission, below is a narration of what happened.  They graciously wrote down the details of the story in the hope that others would not fall for the scam:  

"I've been called this morning by a person who said he was an officer at IRS and he provided me with a batch ID. He said the phone call was being recorded and can be used against me or in my favor in court. He stated that IRS had notified me twice in the previous months by sending me official mails. Since I did not take any action, they filed a case for me with the police, and that there is a current arrest order for my name. After I told him that I had no information regarding this, (and after a very long conversation about tax laws, the etc) he said he can take the arrest order back if I agree to pay the unpaid amount to IRS. But since I had a current arrest order I should not talk to any third party until we settle a payment plan and he lifts the arrest order by contacting the police department. Somewhere during the call, I also received 3 consecutive calls (from unknown number) which I could not answer since I was talking to this person. A fourth call came with 911 appearing as the caller ID. The person on the phone wanted me to take the call when I said this. The 911 call was (said to be) from local police station (of the city where I resided until recently). When I told them I was just on the phone to resolve the situation, he told me the IRS officer had 10 minutes to fax them necessary information to take the arrest order back. Then the so-called IRS officer called again about the settling the payment of the debt in the next 60 min. He wanted me to go to the bank, withdraw money and send it through some service (which I do not remember the name) and get a receipt. This receipt was then going to be collected by a local police officer who is going to come to my address. 

Somewhere during the call I asked him how I can be assured that this is not a scam, and he said he is trying to help me, and he'd not appreciate me "pointing fingers at his identity".

When I wrote this now, it sounds extremely stupid, but I must say at the time they were so professional and convincing. At the end I said I wanted to go to police myself and resolve the issue, he still further insisted that if I go to police they would arrest me, I'd have to go to the court and he wouldn't have a chance to set IRS records straight and lift the arrest order. The phone number of this person was: (347) 467-0975."