Networks of enterprising people around the world have discovered that they can siphon off some of the IRS’s ill-gotten goods by impersonating U.S. taxpayers and applying for refunds. This has become an enormous enterprise, with practitioners both foreign and domestic (including some who have managed to rake in hundreds of thousands of dollars this way from behind bars), and the IRS has only managed to slow the bleeding.

And now these criminal entrepreneurs have struck on the idea of working the game from the other side — they’re impersonating the IRS itself, calling up American citizens, and threatening them with government retribution — such as imminent arrest, deportation, license revocations, or property seizure — if they don’t pay some invented tax liability immediately (but, pay to the scammers, not to the real IRS).

The government calls it the “largest ever” scam of this sort — involving tens of thousands of victims, and millions of dollars in extorted payments. Hilariously, in warning people about the scam, the Treasury Inspector General for Taxpayer Administration claims:

“If someone unexpectedly calls claiming to be from the IRS and uses threatening language if you don’t pay immediately, that is a sign that it really isn’t the IRS calling,” he [Inspector General J. Russell George] said.

Sounds like Mr. George has never gotten a call from the IRS before!

The upshot of this is that the real IRS is going to have a harder time than usual distinguishing itself from smaller-scale thieves, and is going to have to devote even more energy into trying to assert its legitimacy.

And that’s energy the agency doesn’t have to spare — it has fewer employees now than at any time in the last decade, and much more to do: including implementing much of Obamacare, chasing down the rampant identity thieves, and responding to sweeping Congressional subpoenas regarding the TEA Party-targeting kerfluffle.

And morale at the agency has taken a dive for a number of reasons, exacerbating office conflicts, as a whistleblowing letter from IRS attorney Jane J. Kim reveals.

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