Tax Scams for 2014 - Identity Theft, Phone Scams Lead List
The
Internal Revenue Service issued its annual list of tax scams, reminding
taxpayers to use caution during tax season to protect themselves against a wide
range of schemes ranging from identity theft to return preparer fraud.
"Taxpayers
should be on the lookout for tax scams using the IRS name,” said IRS
Commissioner John Koskinen. “These schemes jump every year at tax time. Scams
can be sophisticated and take many different forms. We urge people to protect
themselves and use caution when viewing e-mails, receiving telephone calls or
getting advice on tax issues.”
Illegal
scams can lead to significant penalties and interest and possible criminal
prosecution. IRS Criminal Investigation works closely with the Department of
Justice (DOJ) to shutdown scams and prosecute the criminals behind them.
Identity Theft
Tax
fraud through the use of identity theft tops this year’s list. Identity theft
occurs when someone uses your personal information, such as your name, Social
Security number (SSN) or other identifying information, without your permission,
to commit fraud or other crimes. In many cases, an identity thief uses a
legitimate taxpayer’s identity to fraudulently file a tax return and claim a
refund.
The
agency’s work on identity theft and refund fraud continues to grow, touching
nearly every part of the organization. For the 2014 filing season, the IRS has
expanded these efforts to better protect taxpayers and help victims.
The
IRS has a special
section on IRS.gov dedicated to identity theft issues, including
YouTube videos, tips for taxpayers and an assistance guide. For victims, the
information includes how to contact the IRS Identity Protection Specialized
Unit. For other taxpayers, there are tips on how taxpayers can protect
themselves against identity theft.
Taxpayers
who believe they are at risk of identity theft due to lost or stolen personal
information should contact the IRS immediately so the agency can take action to
secure their tax account. Taxpayers can call the IRS Identity Protection
Specialized Unit at 800-908-4490. More information can be found on the special
identity protection page.
Pervasive
Telephone Scams
The
IRS has seen a recent increase in local phone scams across the country, with
callers pretending to be from the IRS in hopes of stealing money or identities
from victims.
These
phone scams include many variations, ranging from instances from where callers
say the victims owe money or are entitled to a huge refund. Some calls can
threaten arrest and threaten a driver’s license revocation. Sometimes these
calls are paired with follow-up calls from people saying they are from the
local police department or the state motor vehicle department.
Characteristics
of these scams can include:
·
Scammers
use fake names and IRS badge numbers. They generally use common names and
surnames to identify themselves.
·
Scammers
may be able to recite the last four digits of a victim’s Social Security
Number.
·
Scammers
“spoof” or imitate the IRS toll-free number on caller ID to make it appear that
it’s the IRS calling.
·
Scammers
sometimes send bogus IRS emails to some victims to support their bogus calls.
·
Victims
hear background noise of other calls being conducted to mimic a call site.
After
threatening victims with jail time or a driver’s license revocation, scammers
hang up and others soon call back pretending to be from the local police or
DMV, and the caller ID supports their claim.
In
another variation, one sophisticated phone scam has targeted taxpayers,
including recent immigrants, throughout the country. Victims are told they owe
money to the IRS and it must be paid promptly through a pre-loaded debit card
or wire transfer. If the victim refuses to cooperate, they are then threatened
with arrest, deportation or suspension of a business or driver’s license. In
many cases, the caller becomes hostile and insulting.
If
you get a phone call from someone claiming to be from the IRS, here’s what you
should do: If you know you owe taxes or you think you might owe taxes, call the
IRS at 800-829-1040. The IRS employees at that line can help you with a payment
issue – if there really is such an issue.
If
you know you don’t owe taxes or have no reason to think that you owe any taxes
(for example, you’ve never received a bill or the caller made some bogus
threats as described above), then call and report the incident to the Treasury
Inspector General for Tax Administration at 800-366-4484.
If
you’ve been targeted by these scams, you should also contact the Federal Trade
Commission and use their “FTC Complaint Assistant” at FTC.gov. Please add
"IRS Telephone Scam" to the comments of your complaint.
Phishing
Phishing
is a scam typically carried out with the help of unsolicited email or a fake
website that poses as a legitimate site to lure in potential victims and prompt
them to provide valuable personal and financial information. Armed with this
information, a criminal can commit identity theft or financial theft.
If
you receive an unsolicited email that appears to be from either the IRS or an
organization closely linked to the IRS, such as the Electronic Federal Tax
Payment System (EFTPS), report it by sending it to phishing@irs.gov
It
is important to keep in mind the IRS does not initiate contact with taxpayers
by email to request personal or financial information. This includes any type
of electronic communication, such as text messages and social media channels.
The IRS has information
online that can help you protect yourself from email scams.
False Promises
of “Free Money” from Inflated Refunds
Scam
artists routinely pose as tax preparers during tax time, luring victims in by
promising large federal tax refunds or refunds that people never dreamed they
were due in the first place.
Scam
artists use flyers, advertisements, phony store fronts and even word of mouth
to throw out a wide net for victims. They may even spread the word through
community groups or churches where trust is high. Scammers prey on people who
do not have a filing requirement, such as low-income individuals or the
elderly. They also prey on non-English speakers, who may or may not have a
filing requirement.
Scammers
build false hope by duping people into making claims for fictitious rebates,
benefits or tax credits. They charge good money for very bad advice. Or worse,
they file a false return in a person's name and that person never knows that a
refund was paid.
Scam
artists also victimize people with a filing requirement and due a refund by
promising inflated refunds based on fictitious Social Security benefits and
false claims for education credits, the Earned Income Tax Credit (EITC), or the
American Opportunity Tax Credit, among others.
The
IRS sometimes hears about scams from victims complaining about losing their
federal benefits, such as Social Security benefits, certain veteran’s benefits
or low-income housing benefits. The loss of benefits was the result of false
claims being filed with the IRS that provided false income amounts.
While
honest tax preparers provide their customers a copy of the tax return they’ve
prepared, victims of scam frequently are not given a copy of what was filed.
Victims also report that the fraudulent refund is deposited into the scammer’s
bank account. The scammers deduct a large “fee” before cutting a check to the
victim, a practice not used by legitimate tax preparers.
The
IRS reminds all taxpayers that they are legally responsible for what’s on their
returns even if it was prepared by someone else. Taxpayers who buy into such
schemes can end up being penalized for filing false claims or receiving
fraudulent refunds.
Taxpayers
should take care when choosing an individual or firm to prepare their taxes.
Honest return preparers generally: ask for proof of income and eligibility for
credits and deductions; sign returns as the preparer; enter their IRS Preparer
Tax Identification Number (PTIN); provide the taxpayer a copy of the return.
Beware:
Intentional mistakes of this kind can result in a $5,000 penalty.
Return Preparer
Fraud
About
60 percent of taxpayers will use tax professionals this year to prepare their
tax returns. Most return preparers provide honest service to their clients.
But, some unscrupulous preparers prey on unsuspecting taxpayers, and the result
can be refund fraud or identity theft.
It
is important to choose carefully when hiring an individual or firm to prepare
your return. This year, the IRS wants to remind all taxpayers that they should
use only preparers who sign the returns they prepare and enter their IRS Preparer
Tax Identification Numbers (PTINs).
Remember:
Taxpayers are legally responsible for what’s on their tax return even if it is
prepared by someone else. Make sure the preparer you hire is up to the task.
_________________________________________________________
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