If it seems as if the flotsam and jetsam of internet fraud are seemingly unstoppable, you are not alone. Despite the best efforts of browser creators, service providers, and internet users there has been a large uptick in the number of identity thefts reported to authorities. In fact, one of the most audacious scams is that of criminals researching potential victims on the internet and then calling them posing as IRS investigators. They tell the person answering the phone that there is a discrepancy in their latest return, but, if they pay over the phone the matter can be closed. US Treasury Department Inspector General J. Russell George says it is “the biggest scam that we’ve seen this year.” That was in 2014, and since then the problem has grown worse.


Robert Siciliano, a McAfee online security expert, said:

“People in general are so naive about this stuff, they want to believe that the person on the other end is actually real. It’s much more convenient and pleasant to believe that the person calling you is legit. We don’t want to believe that evil is calling us.”

Siciliano continued by stating: “It’s difficult, if not impossible to stop.”

How Widespread is the Problem of Identity Fraud and the IRS?

According to the Government Accountability Office, in 2013 identity thieves got around $5.8 billion in phony refunds and prevented an additional $24.2 billion from being directed to scammers.

This is just one IRS scam. More aggressive and harder to defend against IRS scams include one where a black hatter steals your identity and then files your taxes with his or her address (usually a post office box) to collect a bogus refund.

In 2015, the United States Federal Trade Commission (FTC) fielded 490,000 identity theft complaints, which is a 47% increase in identity theft reports. The FTC Chairwoman Edith Ramirez has called tax refund fraud, “the largest and fastest growing ID theft category” in the history of her organization.

Top IRS Scams for 2016

Each year, the IRS makes a list of the top scams facing consumers. In 2016 the top three were:

  1. Identity Theft
  2. Phone Scams
  3. Phishing

Identity Theft

This is the number one challenge taxpayers and the IRS need to guard against. Identity theft occurs when a person other than yourself gets hold of your personal and financial information and uses it without your permission. The scam involves stealing your identity and then filing a tax return under your name and claiming a totally bogus tax refund. The ideal target for identity theft is a person around 70-years old – as they are less sophisticated about the internet and how it works and often fall victim to phishing scams or other scams that ply upon their lack of knowledge, fear of having done wrong, and tend to be more trusting.

Phone Scams

Just in the past two years, almost 4,600 citizens have received calls from fake IRS agents who have collected over $23 million from victims. The usual spiel is that a person calls you, says you owe the IRS money, and threatens you with arrest unless you pay right away.


Victims of phishing scams are fooled into giving up personal information through email or on a website. Phony emails often ask for personal identification information (PII). The email may contain a link that if clicked downloads and installs spyware, or directs you to another site that looks legitimate but isn’t. The IRS never initiates an email to a taxpayer asking for personal or financial information. But, other sites such as TurboTax or Intuit may – so treat emails from them with caution. If in doubt, call the customer service number from their actual website which can be easily found by a search online. If you still have doubts, treat it as if it were illegitimate.