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Watch out for this widespread IRS scam happening now

Watch out for this widespread IRS scam happening now

Scammers are always working hard to trick you into giving up your money or information. Tax season gives them plenty of opportunities to trick you - I list the dozen biggest tax-related scams of 2014 here - but there's one trick they're hitting hard right now.

The IRS says more than 20,000 taxpayers have already been targeted in this fast-spreading scam, and it can happen to anyone in any state. Treasury Inspector General J. Russell George is calling this scam the largest of its kind.

So make sure you know the details before it happens to you. And be sure to pass it along to friends and family.

The way this scam works is you get a call from someone saying they're with the IRS. They might have a legitimate-sounding badge number, know the last four digits of your Social Security number and the caller ID might even show the legitimate IRS 800 number.

The caller says that you owe the IRS back taxes or there was a problem with your return and you need to pay more immediately. Naturally, they'll accept your bank account information over the phone. Or you can make a wire transfer.

If you don't pay up, they'll threaten you with arrest, deportation or loss of business. Sometimes if you hang up on them, you'll get a call from someone claiming to be local police who will try to scare you into paying up.

The IRS says that if you aren't sure it’s a scam you should hang up and call 800-829-1040 and talk to a real IRS employee to see if there is a problem. If you know it's a scam, you can call the Treasury Inspector General for Tax Administration at 800-366-4484 to report it.

Remember: The IRS typically contacts people by mail – never by phone – about unpaid taxes and will never ask for payment using a prepaid card or wire transfer. Also, remember that the IRS will NEVER ask for a credit card number over the phone.

Now that you know about this scam, it should be easy to avoid.

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