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Beware: The Phony IRS Scam

Posted By Barry Ritholtz On January 8, 2014 @ 7:41 pm In Legal,Really, really bad calls,Taxes and Policy | Comments Disabled

Here is the latest scam:

A call comes in from 415-230-2734 — this is “Internal Revenue” calling. Not IRS, or the full name. San Francisco proper calling NY? No way.

I return the call, get someone with an Indian accent. Do it again 3X, getting a different person with an Indian accent each time.They always answer Agent XXX. (If you have ever spoken to anyone at the IRS, you know there is a very specific protocol they follow — this wasn’t it).

Eventually, I speak speak to a “supervisor” agent Kenneth (really) also with an Indian accent. The whole thing smells incredibly fishy.

I ask “What do I owe” and their response is “What do you think you owe?

Hey, you guys called me! Don’t you have that in your files?

Back and forth we go. He asks me again, so I say $25,000. He comes back with $29,434.59 including “legal expenses.” I laugh to myself.

A few years ago, I was on the Board of Directors of a company, and the outside accountants had made a pricing error when issuing the Board’s exercised stock options. They took in account illiquidity, and thin trading volume and made a huge discount on the exercise price. A year later, someone else discovered the error. In refiling the tax docs for the options, there is a box on the options form marked “Modification.” This genius accountant forgot to check it. So the  mistake made it appear to the IRS that these were were now a new filing of options, and everyone who exercised them failed to report it to the IRS on a timely basis the previous year.  Letters went out, bills were issued. The prior filing was at too low a dollar amount, so while we each owed the difference — a not insubstantial amount — it was a lot less than if we had been issued another big slug of stock.

It was a big pain in the ass, but eventually, we all got it straightened out.

During this snafu., I spent a lot of time speaking to IRS agents, investigators, supervisors. I got to know their rhythms and protocols, how they operated. The people on the phone tonight were obvious not IRS. It was clearly a scam to me.

The coup de grace is what they wanted from me: If I don’t send a transfer voucher –  tonite — they are going to issue an arrest warrant and an officer will be at my house in in 30 minutes to “bring me in.”

I engaged this worm Kenneth for another 10 minutes, before finally asking “Is anyone really dumb enough to fall for this scam?”

As soon as he hears the word scam, he hangs up.

That was 2 hours ago.

I assume the San Francisco number is a forward, and these Fraudsters are not really in the Bay Area.

I’d love to get these guys shut down — any suggestions?


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