Taxpayers Beware of Identity Theft, Scams, and Phishing

By: Shelia M. Whorton, MPA

According to the IRS, taxpayers are falling prey to suspicious emails and various forms of identity theft. With a substantial portion of taxpayers electronically filing their tax returns and directly depositing their refunds into their bank accounts, many scams are on the rise. Fraudsters perpetrating as home repairmen and phony sweepstakes, aren’t new. They often affect the elderly. However, taxpayers should be aware of various forms of phishing, as email allows the creation of recent schemes that lure the unsuspecting

In phishing scams, internet fraudsters send email messages to trick unsuspecting victims into revealing financial and personal information which is used to steal the victim’s identity. In recent scams, these emails claim to come from the IRS.

In one phishing scam an email purporting to come from the IRS lures taxpayers by falsely claiming that the taxpayer can receive $80 by filing out an online customer satisfaction survey. The survey does ask standard customer service questions, however, it also asks for the participant name, telephone number, and credit card information.

Another email scam that appears to be a solicitation from the IRS and the U.S. government for charitable contributions to victims of the recent Southern California wildfires is on the increase. When clicking the link, the recipients are sent to a web site that appears to be the IRS. The participant is then directed to click on a link that opens a donation form that asks personal and financial information that is used to access banking information.

Emails claiming to come from [email protected] , [email protected] , and similar variations, scam recipients by informing them that they are eligible to receive a tax refund of a given amount and directs the recipient to a link and website. The website displayed is an interactive page similar to the genuine IRS page. However, unlike the genuine website it has been modified to ask for personal and financial information

In another scam aimed at individuals and businesses, the recipient is informed that a customer has filed a complaint against a company, of which the email recipient is a member, and that the IRS can act as an arbitrator.

In addition to emails scams, taxpayers are continuously plagued by identity theft schemes. Recently taxpayers have received phone calls about the economic stimulus payments, in which the caller impersonates an IRS employee. The taxpayer is asked for their social security number and banking information, and told that the IRS requires the information to complete the processing of the taxpayer’s additional stimulus payment or recovery rebate. In reality, the IRS uses the information from the taxpayer’s tax return to process both the stimulus and recovery rebate payments, rather than contacting taxpayers by phone.

Other scams include one in which  taxpayers are called by phone and informed that as a senior citizens, they qualify for a interest-free home improvement loan from the IRS, and another in which first-time home buyers are told that they qualify for a $7,500.00  tax credit, but that the paperwork must be completed online by the IRS.  In reality, first-time homebuyers, and those who have not owned a home in three years prior to a purchase can take advantage of a new tax credit. The credit operates much like an interest-free loan because it is paid in equal installments over a 15-year period. The credit is 10 percent of the purchase price of the home, with a maximum available credit of $7,500.00. Taxpayers can apply for the credit while completing their 2008 federal tax return.

Taxpayers are encouraged to take an active role in the prevention of tax scams.  Research all solicitations with claims to be from the IRS. Remember that the IRS communicates in writing by mail. Record all interactions by email and by phone. Lastly, taxpayers are encouraged to report tax schemes, the fraudulent misuse of the IRS logo, forms or other IRS property by calling the Treasury Inspector General for Tax Administration (TIGTA) toll-free hotline at 1-800-366-4484.

Shelia M. Hester-Whorton, MPA
President & CEO Relativity Resources