March 12,2015

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Wyden Calls for Crackdown on Tax Scam Phone Calls Victimizing Taxpayers

Top Democrat Says Wave of Scam Calls from Abroad Looks Like “an Emerging Type of Organized Crime”

WASHINGTON –Senate Finance Committee Ranking Member Ron Wyden, D-Ore., at a hearing today examined the growth of increasingly sophisticated tax scams that are costing American taxpayers billions of dollars every tax season. This includes a boom in tax criminals operating overseas to take advantage of Americans through a variety of schemes, such as the recent fake phone call scam which has targeted more than 366,000 Americans since 2013.

“Scam artists are now stealing Americans’ identities and personally threatening them on an industrial scale, while directly robbing them of their hard-earned money,” Wyden said. “Given the sophistication of this criminal activity and the fact that a lot of it comes from overseas, this looks to me like an emerging type of organized crime. Those in charge of protecting taxpayer dollars must receive the resources they need to work with other tax authorities and make sure criminals can’t just nimbly slide from one scam to the next as they rip off more unsuspecting Americans.”

In addition to increased cooperation between tax authorities, Wyden also called for higher standards for paid tax preparers, many of whom don’t have to meet any standards for competence. Some of these preparers simply botch their customer’s tax filings, while others purposely claim an inflated refund without the taxpayer’s knowledge and pocket the difference. And at the end of tax season they disappear with no accountability for victims. Earlier this year, Wyden and Senator Ben Cardin, D-Md., introduced the Taxpayer Protection and Preparer Proficiency Act to set standards and crack down on fraudulent tax preparers. More information on that legislation can be found here.

Thursday’s hearing featured testimony from Ellen Klem, who is the director of consumer affairs for the Oregon Attorney General. Klem’s office, which works with Oregonians to avoid and recover from tax scams, cited fake phone calls from fraudsters impersonating Internal Revenue Service (IRS) agents to demand money or personal information as the most prevalent scam Oregonians have faced in recent years. Timothy Camus, a witness from the Treasury Inspector General for Tax Administration (TIGTA), which oversees the IRS, said over 366,000 Americans have been targeted by this scam since 2013. Their testimony can be found here.

Wyden’s full opening statement from the hearing can be found here. Video can be found here.