Bold New Tax Scams

Some IRS scam artists are using bolder techniques to get their hands on taxpayers’ personal and financial information.  Emails are very common; we have seen many phony IRS email campaigns over the years.  Deceptive mailers are also prevalent, many of them rising to the level of what I would call a scam.  Far less common is a direct phone call from someone claiming to be an IRS employee, but there has been somewhat of an outbreak of these recently.

Blogger and tax attorney, Kelly Phillips Erb, reported that one of her clients recently got a call from somebody claiming to be from the IRS.  It is Erb’s opinion that IRS scammers are taking advantage of the government shutdown; they feel emboldened by the fact that victims can’t very well call the IRS right now to report them.  A local news source in Minnesota has also recognized an uptick in IRS phone scams, although I don’t agree with them that the test for identifying a phony IRS call is a thick accent.  I have also been informed of a couple IRS phone scams close to home (or perhaps the same one?), one from a client and one from a concerned taxpayer.  The latter was told that the IRS was going to come to his place of employment to arrest him.

Not to get too psychoanalytic or anything, but phony IRS phone calls takes the deception to a whole new level.  Granted, if somebody is tricked into giving up their social security number or credit card number, to them it doesn’t matter if it occurred in an email or over the phone.  The result is the same either way.   However, I do feel like it takes a different type of criminal to be bold enough to swindle somebody in a one-on-one situation.  An email campaign is so impersonal; a criminal can reach thousands of people with a couple clicks of a mouse.  But in a successful phone scam, the criminal needs to utter multiple lies to multiple victims.  It just seems like a much bolder form of tax scam and hopefully it is not a sign of things to come.

IRS Scams: Inside & Out

The IRS makes a lot of money off the American people and certain American people make a lot of money off the IRS.  Some people cheat the system as ordinary citizens from outside the agency.  And some cheat the system by virtue of their insider/employee status.  Tax scams have evolved over time and have adapted to changes in technology.  But what has not changed are the most basic elements of almost all tax scams.  They rely on the fact that nearly everybody in the country has (or potentially could have) some kind of contact or interaction with the IRS.  And they rely on the fact that the IRS is so huge that they can’t always keep very close tabs on their own personnel.

Two recent headlines illustrate my point.

1. Santa Cruz, CA Phone Scam: Scammer targets South Asians and Indians, claims to be an IRS representative, tells victims that there is an open criminal tax investigation against them, and convinces them to wire money.  The strategy is simple: if you contact enough people, somebody is bound to take the bait.

2. Baton Rouge, LA IRS Manager Sentenced for Illegal Tax Business: She operated a tax & accounting business while serving as a supervisory revenue agent and group manager.  She used IRS databases for the benefit of her own business.

The IRS manager has been caught, the phone scammer has not.

Deceptive FTL Mailers

If you have an IRS tax debt, chances are the government has filed a Federal Tax Lien (FTL) against you to protect its interests, especially if the debt is greater than $10,000.  The FTL becomes public information and any number of non-attorney tax relief companies begins sending advertisements.  Many of our clients have come to us with a sizeable stack of mailers, and I am rather disgusted by the way these bottom-feeders try to trick taxpayers into calling them.  Often these mailers are designed to look like official government otices.

Tax relief firms are normally successful in obtaining the following information from the public record:

  • name of taxpayer
  • address of taxpayer
  • lien type (i.e., Federal / State)
  • lien amount
  • lien filing date

The hope is that the taxpayer will recognize the information, see that it is accurate, and then call to get some kind of government-sponsored reduction of the liability.  At least that is what they would have you believe.

It is easy to identify a deceptive tax lien mailer if you know what to look for.  One of the “red flags” is repetition of information.  The sample mailer that I included in this post repeats a United States Code section three times.  The “personal ID number” is also repeated three times.  Phrases like “please read carefully” and “final notice” are also repeated to add urgency.  It is also common to see a phone number repeated two or three times, but often no address.  And finally, maybe the biggest red flag is an “estimated settlement amount.”  There is no way anyone could estimate what the IRS might settle a case for based on the limited information contained in a Federal Tax Lien.

IRS Phishing Hits New Low

image via cupcakeproject.com

By now we are used to reports of phony IRS emails spamming computers around the nation. We know that identify theft scams can result in loss of privacy, loss of property, tax problems, and countless hours of work trying to straighten things out with the IRS and other government agencies. The IRS has made it abundantly clear that they do not communicate to taxpayers via email, and if ever we were to receive an email that purported to be from the IRS, we can rest assured that it is a phony. We know to leave suspicious-looking emails alone (not open them) and immediately report them to phishing@irs.gov.

But now there are reports of phony IRS websites too (See IRS Special Edition Tax Tip 2012-13).  The phony IRS websites look much like the IRS e-services website, but don’t have the all-important .gov designation. There’s a fool-proof way of steering clear of phony IRS websites. If you find yourself on a website that begins with www.irs.gov then you know you are on the official IRS website. If it begins with anything else, it shouldn’t take a tax attorney to tell you that it’s not the IRS!

The IRS Dirty Dozen List is Suspiciously Familiar

Wouldn’t David Letterman’s credibility be questioned if he reused the same Top Ten List each night but changed the order of the list?  That’s what the IRS is doing with its “Dirty Dozen” list.  It’s basically the same thing year after year — a stern warning from the Commish about not looking for tax relief amid tax scams, followed by the same 12 scams rearranged in a different order.  Presumably the list is arranged in a logical order with the most common scams at the top.  But is the order of the list based on empirical data, or is it just anecdotal?  Who knows?

This year the obligatory stern warning went something like this:

Taxpayers should be careful and avoid falling into a trap with the Dirty Dozen. Scam artists will tempt people in-person, on-line and by e-mail with misleading promises about lost refunds and free money. Don’t be fooled by these scams.

~ IRS Commissioner Doug Shulman

And the top three scam were . . .

  1. Identity Theft
  2. Phishing
  3. Return Preparer Fraud

Illegal offshore bank accounts was a close 4th on this year’s list, which is not a surprise given how aggressively the IRS has worked shut them down. I don’t mean to make light of tax scams; they are real, and we should definitely stay vigilant. I am just amused by IRS gimmicks, and this looks like another one.

The Latest Phishing Expedition

Phishing: “a scam typically carried out by unsolicited email and/or websites that pose as legitimate sites and lure unsuspecting victims to provide personal and financial information.” A phishing victim often finds himself burdened with tax problems that are not his own. See IRS website for full detailed information about phishing and everything you need to know about identity theft.

Be on the lookout for the following email subject lines in your inbox:

“Urgent update of tax information is requested”

or

“Tax information required within 30 days.”

It is recommended that you delete these emails immediately because it’s a scam. If you do decide to risk opening the email, the text will look something like this:

Dear Account Holder,

In our continuing effort to guarantee that exact data is being sustained on our systems, as well as to provide you better quality of service; INTUIT INC. has participated in the Internal Revenue Service [IRS] Name and TIN Matching Program.

We have discovered, that your name and/or Taxpayer Identification Number, that is stated on your account does not correspond to the data on file with the Social Security Administration.

In order to check the data on your account, please click here.

Regards,
INTUIT INC.

Corporate Headquarters
2632 Marine Way
Mountain View, CA 94043

Thanks to Kelly Philips Erb for pointing out these scam emails from time to time. If bloggers will repost these scams all over the internet, maybe we can minimize the damage to innocent taxpayers.

Beware of Bogus IRS Emails

I have said this before, but it bears repeating. Any emails you might receive purporting to be from the IRS are more than likely spam. The IRS does not communicate with individual taxpayers in this manner. You should forward any such email to phishing@irs.gov and then delete the emails without opening them.

Apparently there is another batch of bad emails being dispersed this week. Thanks tKelly Phillips Erb at Forbes for the heads up. One is from “manager@irs.gov” and the other is from “support manager@irs.gov.” Hopefully you’re not so curious that you would risk infecting your computer, or worse, giving up personal information to identity thefts. But, if you can’t stand not knowing what the emails say, this is the gist of it:

“Important information about your tax return. We are unable to process your tax return. We recived your tax return. However, we are unable to process the return as field. Our records indicate that the person identified as the primary taxpayer or spouse on the tax return did not provided all the required documents shown on the tax form. Our records are based on information received from the Social Security Administration. Based on this information, the tax account for the individual has been locked.” The message is full of typos, which could make you wonder if it really isn’t from the government. But it goes on to request personal financial information. Its definitely a scam.

IRS-impersonation Scam Emails

The IRS has emphatically stated that they do not send out unsolicited emails. So, if you receive an email that appears to be from the IRS, but requests personal / financial information, then chances are it is a scam. People who fall prey to these emails may become victims of identity theft if they give up the requested information to the scammer or if they unknowingly open up their computers to malicious software.

If you receive an email requesting personal information that appears to be from the IRS, do not open it and do not click on any links. You should immediately forward the email to phishing@irs.gov, then delete the email. If you believe you have become a victim of identity theft, contact our tax relief firm and we may be able to help you.