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Scam Spotlight Series: Beware of Government Imposter Scams – Protect Yourself from IRS Tax Fraud

March 28, 2025

Government imposter scams are a growing threat, with fraudsters posing as officials from agencies like the IRS, Social Security Administration (SSA), Medicare, or law enforcement to deceive individuals into handing over money or personal information. These scams increase during tax season when fraudsters exploit the fear of IRS penalties.

Understanding Government Imposter Scams

In these schemes, scammers contact individuals claiming to be representatives from government agencies. They often use tactics such as:

  • Threats of Arrest or Legal Action: Claiming you owe taxes, have unpaid fines, or are facing legal action unless you pay immediately.
  • Requests for Personal Information: Attempting to collect sensitive data like Social Security numbers, bank account details, or Medicare information under false pretenses.
  • Demanding Unusual Payment Methods: Insisting on payments via gift cards, wire transfers, prepaid debit cards, or cryptocurrency for “guaranteed resolution.”
  • Caller ID Spoofing: Manipulating caller ID to appear as though the call is coming from a government agency like the IRS or SSA.
  • Fake Documentation & Websites: Sending official-looking letters or emails, or directing victims to fraudulent websites mimicking real government pages.

Other Common Government Imposter Scams

  • Social Security Scams – Scammers claim your Social Security number has been suspended due to suspicious activity and demand payment to reactivate it.
  • Medicare Scams – Fraudsters pose as Medicare representatives offering “free” services in exchange for your Medicare number.
  • Jury Duty Scams – Scammers pretend to be law enforcement, claiming you missed jury duty and must pay a fine immediately to avoid arrest.

📊 According to the Federal Trade Commission (FTC), consumers reported losing $789 million to government impersonation scams in 2024, up $171 million in 2023.


Real-Life Scenario: How Sophia Almost Fell Victim to an IRS Tax Scam


Sophia, a 45-year-old elementary teacher, received a call from someone claiming to be an IRS agent. The caller ID displayed Internal Revenue Service,” making it appear legitimate. The “agent” informed Sophia that there was an issue with her recent tax return and that she owed $3,000 in back taxes. Failure to pay immediately, the caller warned, would result in legal action and wage garnishment.

Panicked, Sophia questioned the caller, who provided a fake badge number and referenced personal details, adding to the illusion of legitimacy. The scammer gave Sophia two payment options:

1️⃣ Provide prepaid Visa or Mastercard debit card numbers for instant payment.
2️⃣ Initiate a wire transfer to resolve the issue within the hour and avoid penalties.

Fearing legal trouble, Sophia decided to proceed with the wire transfer. She rushed to her local bank, requesting to send the funds. However, the bank staff noticed red flags and asked her about the situation. They explained that government agencies never demand immediate wire transfers and suggested she verify the claim directly with the IRS.

After consulting with the bank staff, Sophia realized the caller was a fraudster—she had almost been the victim of a scam. Thanks to the bank’s diligence, she avoided losing $3,000 to the scam.

Please note: Sophia’s story is a fictional example created to illustrate how IRS tax scams operate and to protect the privacy of real individuals.


How to Protect Yourself from IRS Imposter Scams

Verify Communications – The IRS initiates contact primarily through mail. If you receive a suspicious call or email, do not provide personal information. Instead, contact the IRS directly at 1-800-829-1040 to verify the claim.

🚨 Be Skeptical of Threats – The IRS will not threaten immediate arrest, deportation, or license revocation for non-payment. Such tactics are red flags for scams.

💳 Avoid Unusual Payment Methods – The IRS does not accept payments via prepaid debit cards, wire transfers, or cryptocurrency. Be wary of any request for payment through these methods.

🔒 Protect Personal Information – Do not disclose sensitive information over the phone or via email, especially if the request was unsolicited.

📞 Report Suspicious Activity – If you suspect a scam, report it to:

  • Your local law enforcement
  • The Treasury Inspector General for Tax Administration (TIGTA): 1-800-366-4484
  • The Federal Trade Commission (FTC): FTC.gov/complaint

By staying informed and vigilant, you can protect yourself and your loved ones from falling victim to government imposter scams.

📢 For more information on how to safeguard against scams, visit the Federal Trade Commission's official website or visit our Cyber Security resource page. 

Visit Cyber Security Resource Center

 

About the Scam Spotlight Series:

Each month, we shine a light on the latest scams that fraudsters use to trick people into giving up their money or personal information.  In 2024, consumers reported losing over $12 billion to fraud, with 20-29 and 70-79 year olds being the most targeted age groups, according to the Federal Trade Commission. By sharing real-life examples, we aim to uncover the tactics scammers use, helping you recognize and avoid their schemes. Along the way, we’ll also provide practical tips to safeguard yourself and your loved ones. At Rivers Edge Bank, your safety and security are our top priorities—because protecting your hard-earned money starts with staying informed.  To learn more about cybersecurity best practices, visit our Cyber Security page.

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