One of the newest tax scams making the rounds is directed at college and university students and involves what's called a federal student tax.
Here is how it works. A call is made directly to a student. The caller has some piece of information that links the student to the call, something like the name of the college or university they attend, or a more personal item, all of which is used to make the call seem more real.
The caller then tells the student they owe a federal student tax, which is something that does not exist, but the caller is very well equipped to make the student believe it does. While the student is trying to understand what the caller is talking about, the caller demands money and wants it wired through untraceable methods. And then, if confronted by the student, the caller makes threats to report the student to the police, the IRS, or whatever agency or person they think will make the student bolt into action and send a payment or provide personal information, both of which should never be done.
So, what to do? Be aware of the federal student tax scam, talk to your kids or grandkids, and understand the best course of action when you or your student gets one of these calls is to just hang up. But that does not always end the process. We are warning students that a caller who has been rebuked may have someone else call again, with an even graver message. However, with the knowledge that the federal student tax does not exist and that the IRS does not make these types of calls (the IRS will send a letter first if anything is owed), students, parents, and grandparents can be more empowered to discuss and handle these situations.
If you or a student you know receives one of these calls, make sure it is reported to the IRS. And, tell your friends; they may be the next targets for this tax scam.