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By Patrick Temple-West

WASHINGTON -- Thousands of Americans nationwide have been targeted since August by a phone scam in which fraudsters claim to be from the U.S. Internal Revenue Service and demand money for unpaid taxes, the IRS' watchdog said Thursday.

The Treasury Inspector General for Tax Administration said it has received more than 20,000 complaints from people, including recent immigrants, about the scam.

Thousands of victims have collectively paid more than $1 million to the scammers, the agency said.

"This is the largest scam of its kind that we have ever seen," said J. Russell George, the head of TIGTA in a statement.

The fraudsters can manipulate victim's phone's caller ID so it displays the number of a local IRS office, TIGTA said.
In some cases, the fraudsters have also told victims parts of their Social Security numbers.

In cases where victims hung up, fraudsters have called back displaying a local police phone number on caller ID, TIGTA said.

Potential victims worried about their immigration status have been threatened with deportation, TIGTA said.

The scam has occurred in almost every state and the fraudsters have followed a uniform script, a senior TIGTA official said on a conference call with reporters.

The technology needed to manipulate caller ID displays is easily available to the public, the official said.

Major phone companies have been warned about the scam, as well as companies that provide voice-over-the-Internet call services, the official said.

Claudia Hill, a licensed tax preparer in Cupertino, Calif., said that in one week last month, four of her clients complained of such scam calls. Before this year, none of her clients had previously mentioned phone scams, said Hill, who said she prepares about 1,000 tax returns a year.

"The IRS is not proactive enough in getting out in front of any of this mess," she said.

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The total amount of tax you pay reaches far beyond what you owe the federal government. Depending on where you live, most likely you're required to pay additional taxes, including property and sales tax. The disparity between the amount of tax you pay in a low-tax city and that in a high-tax city can be dramatic. Living in any of these 10 cities could save you a bundle, although the exact amount may fluctuate based on your income and lifestyle choices.

Cities with the Highest Tax Rates

Much ado is made in the press about federal tax brackets, but cities can carry a tax bite of their own. Even if you live in a state that has no income tax, your city may levy a variety of taxes that could eat away the entire benefit of living in an income tax-free state, including property taxes, sales taxes and auto taxes. Consider all the costs before you move to one of these cities, and understand that rates may change based on your family's income level.

Great Ways to Get Charitable Tax Deductions

Generally, when you give money to a charity, you can use the amount of that donation as a deduction on your tax return. However, not all charities qualify as tax-deductible organizations. While there are many types of charities, they must all meet certain criteria to be classified by the IRS as tax-deductible organizations. There are legitimate tax-deductible organizations in many popular categories, such as those listed below.

A Freelancer's Guide to Taxes

Freelancing certainly has its benefits, but it can result in a few complications come tax time. The Internal Revenue Service considers freelancers to be self-employed, so if you earn income as a freelancer you must file your taxes as a business owner. While you can take additional deductions if you are self-employed, you'll also face additional taxes in the form of the self-employment tax. Here are things to consider as a freelancer when filing your taxes.

Tax Deductions for Voluntary Interest Payments on Student Loans

Most taxpayers who pay interest on student loans can take a tax deduction for the expense ? and you can do this regardless of whether you itemize tax deductions on your return. The rules for claiming the deduction are the same whether the interest payments were required or voluntary.

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Anyone else find it interesting that our "intelligence" community can read in real time our e mails and collect data on every phone call we make, but can't figure out how to locate and stop massive scams? Are Nigeria and other sites of scam origins so well protected that we can't crack them? This to me spells gross incompetence, especially when you see how poorly written these scam approaches are. Come on Americans, let's demand a little better performance out of our "intelligence" agencies. They take enough of our tax dollars to satisfy their bloated egos.

March 26 2014 at 2:12 PM Report abuse rate up rate down Reply
Donald Nisley

The government hates competition

March 24 2014 at 1:28 PM Report abuse rate up rate down Reply

One thing for sure, these folks aren't getting your personal information from NSA spying. Care to guess who?

March 22 2014 at 5:54 PM Report abuse rate up rate down Reply

you mean the IRS targeting political entity scandal?

March 22 2014 at 5:45 PM Report abuse rate up rate down Reply

Title is about the IRS scam...Darn, I thought it was going to be about the IRS stealing conservative people 1st Amendment rights.

March 22 2014 at 5:31 PM Report abuse rate up rate down Reply

Hopefully, as the IRS intrudes with greater regularity and detriment through being the enforcement arm of ObamaCare, the American people will demand a much simplier, fairer, and sane tax system that will reduce the size and scope of the IRS. The more they do, the more bureaucratic incompetence they display. They remain the closest thing this country has to the Gestapo. Most are unaware of their real world power to destroy people just with their mistakes. Even totally innocent people find the remedies to IRS mistakes next to impossible to get corrected, and irrationally time consuming.

March 22 2014 at 5:20 PM Report abuse rate up rate down Reply

WTF...i was scammed in 2005...what are they doing about my issue....smh it takes over 20,000 people for you guys to listen and follow-up...i gave up until now!!!!!

March 22 2014 at 4:49 PM Report abuse rate up rate down Reply

yes the scam is called irs and needs to be shut down

March 22 2014 at 3:44 PM Report abuse +2 rate up rate down Reply

Another IRS scandal by obrainless administration, wonder if holder knows anything on this one
Lunatics at work

March 22 2014 at 3:05 PM Report abuse +1 rate up rate down Reply

how do these people cash a check made out to the irs...... come on surley they cont make the check out to an individual, some thing is wrong with this story.. you mean to tell me the irs can not track a check back to who cashed it .. come on

March 22 2014 at 2:03 PM Report abuse rate up rate down Reply
1 reply to bcrnbs2's comment

how do these people cash a check made out to the irs...... come on surley they cont make the check out to an individual, some thing is wrong with this story.. you mean to tell me the irs can not track a check back to who cashed it .. come on

ME: Your skepticism is valid..The irs themselves is doing this, who else has access to your ss#?????

March 22 2014 at 2:41 PM Report abuse rate up rate down Reply
1 reply to Imam's comment

You'd be surprised. Some of these advanced background check entities have and will sell you out for a couple of bucks.

March 22 2014 at 6:00 PM Report abuse rate up rate down