PhotoScammers are usually pretty savvy characters. When they choose victims they normally look for the most vulnerable people.

That's why senior citizens are probably the most targeted scam victims. But increasingly, scammers are also targeting young people, whose life experiences have not yet prepared them for sophisticated cons.

That brings us to the “Federal Student Tax Scam.” The Internal Revenue Service (IRS) recently warned that scammers are making phone calls, pretending to be officials of the IRS.

The scammers target young people, demanding payment of the federal student tax, which of course does not exist. But the victim is threatened with prosecution because the tax is overdue. The only way to avoid prosecution? Wire payment immediately.

Scams continue to evolve

“These scams and schemes continue to evolve nationwide, and now they’re trying to trick students,” said IRS Commissioner John Koskinen. “Taxpayers should remain vigilant and not fall prey to these aggressive calls demanding immediate payment of a tax supposedly owed.”

Koskinen is correct. This new scam is simply a variation of the “Payday Loan Scam,” which first popped up about a decade ago. In that scheme, scammers contacted people who had applied for, but not received, payday loans and threatened them with arrest over non-payment.

The scammers' victim list came from an online payday lender. Scammers obtained sensitive information about their victims, making this scam even more dangerous.

Masquerading as the IRS

The IRS says this latest variation of the scam is also part of a long-time trend of masquerading as the tax agency in order to either frighten victims or persuade them to divulge information.

So far in 2016, the IRS says it has seen these examples from scammers:

  • Claiming taxes are owed on an iTunes gift card
  • Asking for W-2 information from payroll and human resources professionals
  • Asking a victim to “verify” tax return information over the phone
  • Claiming to be from the tax preparation industry

Red flags

The IRS says it will never call taxpayers and demand immediate payment over the phone. It simply isn't done.

The IRS will never threaten to have local police arrest a taxpayer for non payment. It will never require you to use a specific payment form to satisfy a tax bill.

In that regard, it will never ask you to use a credit or debit card to make a payment by phone.

These are all the hallmarks of a scam. The IRS says consumers who are contacted with any of these demands should hang up and report the incident to the IRS at this link, or call 800-366-4484.

And a heads up to college students – there is no National Student Tax.

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