Tax phone scam uses fear-baiting to get money out of victims

AP Graphic

Twenty-six million dollars — that’s how much money victims have lost to an IRS phone scam in just a few years.

You’d think most people would just hang up, but the scammers know how to keep you on the line through fear-baiting.

Hundreds of thousands of potential victims being told, sometimes threatened, over the phone that the IRS is coming after them.

“The consumer will go to jail, the police will be sent to their house, they’re going to be sued, they’re taken to court, any number of things to try and coerce the consumer into providing the caller with the money that they’re demanding,” said Better Business Bureau Hawaii CEO Greg Dunn.

In just the last couple of weeks, Dunn said they’ve received more than two dozen reports of people receiving the fraudulent calls, and our Action Line department has also taken more calls as well.

That’s because tax season has just ended, which allows scammers the chance to corner you into thinking you haven’t paid your tax bill.

“It’s effective, and unfortunately people haven’t recognized that it’s fake, it’s a scam, and there’s still lots of potential victims out there that can fall prey to this,” Dunn said.

The Internal Revenue Service reports that since October 2013, more than 896,000 people have gotten such a phone call, with more than 5,000 falling victim to the scam. When you add it all up, the scammers have collected $26.8 million from victims.

“Certainly, you don’t want to call the person back. You don’t want to send them any money,” said Dunn. “Whatever you do, don’t wire money and don’t send them a prepaid money card.”

The IRS continues to remind people that it does not demand payment in the form of a prepaid money or debit card, and it does not threaten people with arrest.

And if you’re not sure if the phone call is legitimate, hang up and call the IRS directly — the number’s on your tax return.

If you have a consumer concern or are interested in becoming an Action Line volunteer, give us a call at 591-0222 weekdays from 11 a.m. to 1 p.m. or send an email to

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