Here's what I did to avoid becoming a victim when someone called and tried to rip me off. By Cameron Huddleston, Former Online Editor June 17, 2014 One morning last week when I answered the phone, a woman at the other end of the line told me she was with the IRS and that I was being investigated. My immediate reaction was panic. But as the caller started telling me why I supposedly was in trouble, I quickly realized that scammers -- not the IRS -- were targeting me.SEE ALSO: IRS Warns of E-mail Tax Scam Before I recount the conversation, let me emphasize that the best course of action to take when a scammer calls is to hang up. Period. I stayed on the line out of professional curiosity. I hoped to gain more insight into the nature of the con that I could share with Kiplinger readers -- and I did. Here's how I recognized the scam. The woman on the phone told me that a variety of charges were being filed against me for failing to pay taxes and attempting to defraud the IRS. She asked if I had a criminal attorney to represent me. "No," I answered. Then she said I owed $4,000. None of what she was saying added up, but it was easy to see how her accusations and efforts at intimidation could rattle many an unsuspecting taxpayer. I was fortunate because I knew that what the woman was saying sounded familiar to a scam I had written about in November 2013, IRS Warns of a New Phone Scam. The IRS had issued a warning that scammers were calling people, telling them that they owed money and threatening that they would be arrested if they didn't pay. To resolve the issue, victims typically were being told to pay the money owed to the IRS through a pre-loaded debit card or a wire transfer. But the scammer didn't get that far with me. Advertisement From past run-of-the-mill dealings with the IRS and articles I've written for Kiplinger, I knew that the IRS initiates contact with taxpayers by mail, not by phone. And I knew that if I truly were being audited, the process would have begun with a letter and that I would've been asked to supply the IRS with records (see What Are the Odd That Your Return Will Be Audited? And What Should You Do if It Is?). I certainly wouldn't be charged with anything before actually having an opportunity to make a case for any questionable items on a tax return. So I asked the woman if the IRS had attempted to contact me by mail. She said it had. I followed up by asking to what address had letters been sent. She rattled off my former address. When I told her that wasn't my current address and that I had received other correspondence recently from the IRS (tax forms, not audit notifications) at my current address, she hung up. I felt victorious but realized how easily someone without my knowledge of tax scams could have been duped. Tax fraud often tops the Federal Trade Commission's list of biggest identity-theft complaints. And the IRS sees countless scams meant to trick taxpayers into revealing personal information. That's why it's important to be aware of tell-tale signs of IRS-related scams: Advertisement Callers claiming to be IRS agents. As I mentioned above, the IRS initiates contact with taxpayers by mail, not by phone. If you get a call from someone claiming to be with the IRS, don't reveal any personal information or credit-card information because the IRS doesn't ask for payments over the phone. Instead, hang up and call the IRS at 1-800-829-1040 to see if an agent has a legitimate need to contact you. Unsolicited e-mails from the IRS. Not only will the IRS not initiate contact with taxpayers by phone, but also it won't use e-mail, text messages or social media. So do not reply to unsolicited e-mails or messages supposedly from the IRS, open any attachments (which could contain viruses) or click on any links (which could take you to a fraudulent Web site). Forward all suspect e-mails to email@example.com. For more information about lowering your risk of becoming a victim, see How to Avoid Tax Scams and our Scams Special Report. If scammers have targeted you, we'd like to hear about your experience. Please share it in the comments section below.