Tax Fraud - Tax-Related Identity Theft

During tax season the number one complaint from consumers, identity theft, increases.

During tax season the number one complaint from consumers, identity theft, increases. And the IRS is well aware of it. On their website, http://www.irs.gov/, they have a special article dedicated to "Identity Theft and Your Tax Records". In this article the IRS gives information on how to protect yourself from tax related identity theft and steps for alerting the IRS if you believe your identity has already been stolen. The IRS makes it very clear at the beginning of the article that the IRS never initiates contact with taxpayers using email.

So, if you should receive an email message that looks like it came from the IRS, then you know it's a scam. While it's always important to protect your personal and financial information, we recommend being especially vigilant during January through April of each year.

Tax-Related Identity Theft Scams

We recommend reading the IRS article "Suspicious E-Mails and Identity Theft" for more information. This article includes links to the various IRS documents warning of tax refund phishing scams, tips on how you can shut down phishing scams, tips on how to protect your identity, descriptions of recent schemes and how to report fraud.

Here's an abbreviated version of the recent scheme descriptions taken from the "Suspicious E-Mails and Identity Theft" article on the IRS website:

A scheme in which a tax refund form is e-mailed, supposedly by the Taxpayer Advocate Service (a genuine and independent organization within the IRS which assists taxpayers with unresolved problems), is particularly blatant in the amount and type of information it requests. The top of the form tells the recipient that they are eligible for a tax refund for a specified amount. The form asks for name, address and phone number and a substantial amount of financial information, such as bank account number, credit card number and expiration date, ATM PIN number and more. It also asks for mother's maiden name (frequently used by many people as an account security password). At the bottom is a phony name and signature, claiming to be that of the Taxpayer Advocate. The implication is that the taxpayer must fill in and submit the form to receive a tax refund. In reality, taxpayers claim their tax refunds through the filing of an annual tax return, not a separate application form.

A recent e-mail scam tells taxpayers that the IRS has calculated their "fiscal activity" and that they are eligible to receive a tax refund of a certain amount. Taxpayers receive a page of, or are sent to, a Web site (titled "Get Your Tax Refund!") that copies the appearance of the genuine "Where's My Refund?" interactive page on the genuine IRS Web site. Like the real "Where's My Refund?" page, taxpayers are asked to enter their SSNs and filing status. However, the phony Web page asks taxpayers to enter their credit card account numbers instead of the exact amount of refund as shown on their tax return, as the real "Where's My Refund?" page does.

In a new phishing scam, an e-mail purporting to come from the IRS advises taxpayers they can receive $80 by filling out an online customer satisfaction survey. In addition to standard customer satisfaction survey questions, the survey requests the name and phone number of the participant and also asks for credit card information.

In another recent scam, consumers have received a "Tax Avoidance Investigation" e-mail claiming to come from the IRS' "Fraud Department" in which the recipient is asked to complete an "investigation form," for which there is a link contained in the e-mail, because of possible fraud that the recipient committed. It is believed that clicking on the link may activate a Trojan horse virus.

E-mails claiming to come from tax-refunds@irs.gov, admin@irs.gov and similar variations told the recipients that they were eligible to receive a tax refund for a given amount. It directed recipients to claim the refund by using a link contained in the e-mail which sent the recipient to a Web site. The site, a copy of the IRS Web site, displayed an interactive page similar to a genuine IRS one; however, it had been modified to ask for personal and financial information that the genuine IRS interactive page does not require.

The Treasury Inspector General for Tax Administration (TIGTA) has found numerous separate Web sites in at least 20 different countries hosting variations on this scheme.

A few tips regarding the IRS refund and Phishing scams

• The IRS does not ask anyone for personal or financial information via unsolicited emai
• Taxpayers do not have to complete special forms to receive their tax refunds
• Do not open attachments from emails purporting to be from the IRS because they may contain malicious code that could infect your computer
• Contact the IRS directly at 800-829-1040 to determine if the IRS is trying to reach you about a possible tax refund

Please keep in mind that as April 15 draws closer the frequency of tax-related phishing scams increases.

Related Tax Fraud Links: