Scammers are working overtime trying to get your money in a continuing phone scam.

The Internal Revenue Service reports sophisticated IRS impostors are calling people and demanding immediate payment.

In some cases they're also impersonating local law enforcement and threatening you with immediate arrest unless you send untraceable money amounting in the thousands of dollars for back taxes that you supposedly owe.

Read more: 14 red flags that will get you audited by the IRS

Here's how this IRS phone scam works

The scammers use phone spoofing to make their number come up as "IRS," and they already have the last 4 digits of your Social Security number -- both of which lends them an air of legitimacy.

Here are some of their other tactics to watch out for:

  • They use common names and fake IRS badge numbers.
  • They send bogus IRS e-mails to support their scam.
  • They call a second time claiming to be the police or department of motor vehicles, and the caller ID again supports their claim.

You're told to submit payment either by wire or by prepaid debit card. So far, 1,000 people have been swindled out of $5 million, according to IRS officials.

Read more: Fixing the broken tax code

Know this: The IRS will *not* contact you by phone asking for money. They only contact you by snail mail if they want to get in touch with you. So if you get one of these calls, hang up the phone!

Read more: Beware of the "One Ring" scam on your phone


Image of Clark Howard About the author: Clark Howard

Clark Howard is a consumer expert whose goal is to help you keep more of the money you make. His national radio show and website show you ways to put more money in your pocket, with advice you can trust. View More Articles

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