Scammers Posing As Internal Revenue Service Ready To Defraud

WALLINGFORD — As the April 15 deadline for filing your 2007 income tax return approaches, Better Business Bureau Connecticut has a warning: Tax fraud is heading your way to a mailbox, telephone, or e-mail inbox near you.

According to Paulette Hotton, president of Better Business Bureau Connecticut, identity thieves, con artists, and others who are looking to obtain personal information may pose as agents of the Internal Revenue Service, causing Connecticut taxpayers to get caught in their trap.

Income tax time is a stressful time of year and tax-time scammers often prey upon consumers’ anxiety and trust.

“These scammers are very adept at posing as IRS representatives whether over the phone, by mail, or e-mail,” Ms Hotton warned. “Once they get consumers’ trust they move quickly to fooling victims into giving out precious personal and financial information.”

Many victims are caught off guard by official-looking e-mails with a logo from the IRS, credit card companies, or financial institutions and in many cases are addressed to the recipient by name.

Know the Red Flags:

1. If the IRS has questions or concerns about a tax return they typically contact the consumer by telephone, not e-mail. Some of these schemes are executed outside the United States and may have spelling or grammatical errors.

2. Better Business Bureau warns consumers about one particular scam in which the con artists pose as Internal Revenue Service representatives, saying they are calling to verify a taxpayer’s bank account number because the IRS “has noticed the individual has not yet cashed their tax refund check.” The IRS does not monitor whether taxpayers cash refund checks or not, and the service primarily communicates with taxpayers by telephone or in writing through the US Postal Service.

3. In a new twist aimed at non-US residents subject to the US tax code, the IRS reports that non-US residents are receiving bogus letters in the mail along with a fake form W-8BEN to establish appropriate tax withholding. Recipients are asked to fill out the form and include account numbers, personal identification (PIN) numbers, their mother’s maiden name, and their passport number. If you receive any tax-related forms, you should go online and verify the authenticity of the forms on the IRS website to those sent via e-mail. Form W-8BEN, for example, does not ask for personal information.

4. The scammers may also be after your tax refund check. With the approval of the 2008 economic stimulus package, consumers are advised to be on the lookout for refund scams. They may come in the form of e-mails, letters, and telephone solicitations designed to separate consumers from their tax refunds. While there is no specific information on any tax refund scams so far this year, Better Business Bureau says it is only a matter of time.

The BBB is advising consumers that they may receive what looks like a legitimate IRS check in the mail, including instructions to wire money back to the IRS or some other third party whom is supposedly processing the check on behalf of the IRS to cover “fees” or “taxes.” Better Business Bureau is also advising taxpayers they will almost assuredly receive phone calls or e-mail trying to trick them into submitting personal information to receive their refund checks.

“The bottom line is that consumers do not need to divulge any information beyond filing tax returns, nor wire money for any purpose to receive their refund check. Our website, www.bbb.org, provides trustworthy advice on tax season issues and other personal finance topics,” added Ms Hotton.