Identity Theft, Phishing And Your Tax Information

Consumers have been warned in the past on the fraudulent use of the IRS name or logo by scammers trying to gain access to consumers’ financial information in order to steal their identity and assets. The Internal Revenue Service has issued several recent warnings with a lot of detail on how to prevent being scammed. When identity theft takes place over the internet, it is called phishing.

Phishing (as in “fishing for information” and “hooking” victims) is a scam where internet fraudsters send e-mail messages to trick unsuspecting victims into revealing personal and financial information that can be used to steal the victims’ identity. Current scams include phony e-mails which claim to come from the IRS and which lure the victims into the scam by telling them that they are due a tax refund.

Identity theft is somewhat different that phishing since it can not only be committed through e-mail (phishing) but it can also be done by other means such as regular mail, fax or telephone, or even by going through your trash.

Here are some of the warnings provided by the IRS on such scams:

IRS Warns of New E-Mail and Telephone Scams Using the IRS Name; Advance Payment Scams Starting

IRS Warns of New E-mail Scam Offering Cash for Participation in “Member Satisfaction Survey”

IRS Warns of Phony e-Mails Claiming to Come from the IRS

IRS Establishes e-Mail Box for Taxpayers to Report Phony e-Mails

Identity Theft and Your Tax Records

As soon as the IRS learns about designs involving use of the IRS name, it tries to alert consumers as well as authorities that can shut down the scheme. The most recent schemes are listed below.

An e-mail claiming to come from the IRS about the “2008 Economic Stimulus Refund” tell recipients to click on a link to fill out a form, apparently for direct deposit of the payment into their bank account. This appears to be an identity theft scheme to obtain recipients’ personal and financial information so the scammers can clean out their victims’ financial accounts. In reality, taxpayers do not have to fill out a separate form to get a stimulus payment or have it directly deposited; all they had to do was file a tax return and include direct deposit information on the return.

Some people have received phone calls about the economic stimulus payments, in which the caller impersonates an IRS employee. The caller asks the taxpayer for their Social Security and bank account numbers, claiming that the IRS needs the information to complete the processing of the taxpayer’s stimulus payment. In reality, the IRS uses the information contained on the taxpayer’s tax return to process stimulus payments, rather than contacting taxpayers by phone or e-mail.

A new variation of the refund scheme (see items below) is directed toward organizations that distribute funds to other organizations or individuals. In an attempt to seem legitimate, the scam e-mail claims to be sent by, and contains the name and supposed signature of, the Director of the IRS Exempt Organizations area of the IRS. The e-mail asks recipients to click on a link to access a form for a tax refund. In reality, taxpayers claim their tax refunds through the filing of an annual tax return, not a separate application form.

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 scam e-mail 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 has been making the rounds. A link in the e-mail, when clicked, sends the e-mail recipients to a Web site that looks like the IRS Web site, but isn’t. They are then directed to click on a link that opens a donation form that asks for personal and financial information. The scammers can use that information to gain access to the e-mail recipients’ financial accounts.

In a variation, an e-mail scam claims to come from the IRS and the Taxpayer Advocate Service (a genuine and independent organization within the IRS whose employees assist taxpayers with unresolved tax problems). The e-mail says that the recipient is eligible for a tax refund and directs the recipient to click on a link that leads to a fake IRS Web site.

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 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.

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.

An e-mail scheme claiming to come from the IRS’s Criminal Investigation division tells the recipient that they are under a criminal probe for submitting a false tax return to the California Franchise Board. The e-mail seeks to entice people to click on a link or open an attachment to learn more information about the complaint against them. The e-mail link and attachment contain a Trojan Horse that can take over the person’s computer hard drive and allow someone to have remote access to the computer.

One e-mail scam, fraught with grammatical errors and typos, looks like a page from the IRS Web site and claims to be from the “IRS Antifraud Comission” (sic), a fictitious group. The e-mail claims someone has enrolled the taxpayer’s credit card in EFTPS and has tried to pay taxes with it. The e-mail also says there have been fraud attempts involving the taxpayer’s bank account. The e-mail claims money was lost and “remaining founds” (sic) are blocked. Recipients are asked to click on a link that will help them recover their funds, but the subsequent site asks for personal information that the thieves could use to steal the taxpayer’s identity.

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.

Another scheme suggests that a customer has filed a complaint against a company, of which the e-mail recipient is a member, and that the IRS can act as an arbitrator. This appears to be aimed at business as well as individual taxpayers.