It's targeting people nationwide, and right here in Indiana.
It can be easy to see why people are falling for this scam.
The victims are getting a call - and the caller ID says IRS - and on the other end of the line is a fake agent.
These scammers say you owe money, and if you don't pay immediately, your license will be revoked or you could be arrested. Many have wired that sum to a Green Dot prepaid credit card.
In some cases, if the victim doesn't cooperate right away, they get another call from someone else saying they're with law enforcement and are coming to throw them in jail.
The IRS has launched a full-scale investigation, and are asking anyone who may have gotten one of these calls to report it.
"We want to make sure that we're able to track these guys down and have as much information. Track them down and shut them down. But in the meantime, the best way to protect the public is to inform them that the IRS is not going to call you asking for immediate payment of a tax debt that you are unaware of," said IRS spokesman Luis Garcia.
The IRS says they mainly communicate with you through letters. If you do get a phone call you think is real, ask for the agent's name and badge number, then call the IRS yourself to verify that information.
"If an IRS civil agent is contacting you, they will have a badge number, they will have other information about the taxpayer that they would know they've had this previous relationship," said Special Agent Kerry Hannigan of IRS Criminal Investigations.
What are some of the signs that this is a scam if you do get a phone call? Experts say you know if you owe any money, so that's number one.
Also, these scammers are often threatening and aggressive on the phone so that's a red flag.
Some good news though -- NBC 2 checked in at some local tax agencies and they haven't reported any victims of this scam here in the Valley.
The IRS also says if you do owe back taxes, they don't demand in full it upfront; there are payment options and plans.
If you think you've gotten one of these calls, tell your local police or tax preparer.
You can also call the IRS at (800) 829-1040 or report it online by clicking here.