ID theft & scams Archives

Department Of State Sounds Warning On Business Forms

September 27, 2020

Normally, I don’t post about state-specific issues, but I am in this instance, and here’s why: when you read what this company is doing, it may well ring a bell even if you don’t live in Pennsylvania. That’s because these kinds of schemes know no geographic boundaries: you’ll find them all over the country.

In this specific instance, the Pennsylvania Department of State is warning about a company calling itself “PA Certificate Service.” The company is sending forms to businesses that look like this (partial look below), stating that the business has “one step left” to obtain an “elective Certificate of Good Standing” by paying $87.25 to the company to procure the certificate. Companies are informed that they may need the certificate for loans, renewing business licenses, for tax or other business purposes.

According to the Pennsylvania Department of State, there is no company registered to do business in Pennsylvania by the name of “PA Certificate Service.” The address used by this company is that of a UPS store located in Harrisburg and the phone number on the mailing (1-855-211-9705) goes to a call center located outside of Pennsylvania.

The Department of State is calling this a “partial scam” because the mailing contains some incorrect and overbroad information. The Pennsylvania Department of State does not issue “Certificates of Good Standing.” Instead, Pennsylvania law permits “Subsistence Certificates” to be issued to domestic filing associations and “Certificates of Registration” for registered foreign associations. The certificates can be obtained directly from the Department of State for $40.

Again, this notion isn’t limited to Pennsylvania. Be smart. If it doubt, assume it’s a scam.

IRS Will Allow Taxpayers To Opt-In To IP PIN Program

September 24, 2020

Beginning in January 2021, the Internal Revenue Service (IRS) will be expanding the voluntary Identity Protection PIN (IP PIN) program.

What Is An IP PIN?

An IP PIN is a six-digit number assigned to eligible taxpayers to help prevent tax refund fraud on federal income tax returns. An IP PIN helps the IRS to verify a taxpayer’s identity. It’s used for Forms 1040, 1040PR, and 1040SS (you will not use it on an amended return or on a request for extension).

I like to think of the IP PIN like the security code on the back of your credit card: without your assigned IP PIN, your tax return can’t be processed. If a tax return is e-filed with your SSN but an incorrect or missing IP PIN, the IRS e-file system will reject the return until you submit it with the correct IP PIN. If a tax return is filed on paper with your SSN but an incorrect or missing IP PIN, the IRS will delay processing the return – including any refund due – while they determine the validity of the return.

Before 2021

Previously, confirmed identity theft victims would receive an IP PIN if their identity theft case was resolved before the start of the next filing season. And, if you resided in one of 20 locations, you were eligible for the online IP PIN Opt-In Program. In 2020, to be eligible, you must have filed a federal return in 2019 as a resident of Arizona, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Illinois, Maryland, Michigan, Nevada, New Jersey, New Mexico, New York, North Carolina, Pennsylvania, Rhode Island, Texas or Washington. The IRS had noted last year that they would be expanding eligibility for the IP PIN Opt-In Program.

Beginning In 2021

Beginning in 2021, taxpayers may go to the Get an IP PIN tool on the IRS website, be authenticated, and immediately access a six-digit IP PIN. If you have a Social Security number (SSN) or Individual Tax Identification Number (ITIN), and you can verify your identity,you’re eligible for the Opt-In program. To opt-in, you must use the online Get an IP PIN tool.

What If You Can’t Authenticate Your Identity Online?

If you cannot authenticate your identity online and you make $72,000 or less, you may file Form 15227, Application for an Identity Protection Personal Identification Number, which will be available beginning January 2021. An IRS assistor will call you with a series of questions to verify your identity, and the IRS will issue your IP PIN at the start of the next calendar year.

If you cannot authenticate online and you make more than $72,000, you may have an option to verify your identity in person at an IRS office (this is still being vetted).

No matter the circumstances, you cannot obtain an IP PIN by calling the IRS.

Valid For One Year

IP PINs are only valid for one calendar year. You’ll have to renew your IP PIN each year, and if you lose your IP PIN, you’ll need to retrieve it or have it reissued to e-file your return. So be thoughtful, since there currently is no opt-out feature.

It’s Not Your Filing PIN

Don’t confuse the IP PIN with the 5 digit PIN you use to e-file your returns: those PINS aren’t interchangeable.

Keep It Secure

Once you have your IP PIN, don’t pass it around. Your tax professional will need it to prepare your return, but otherwise, keep it close. According to the IRS, the agency will never ask for your IP PIN. That’s good information to help you avoid phone, email, or text scams trying to trick you into revealing your IP PIN.

Victims Of Identity Theft

One more thing: if you are a victim of identity theft, follow the standard IRS recommendations. Form 14039, Identity Theft Affidavit (downloads as a PDF), is still applicable when your e-filed return is rejected because of a duplicate SSN filing. Once the case is resolved, the IRS will automatically send you an IP PIN via US mail at the start of the next calendar year.

Resources In Other Languages

If you need more information about IP PINs, you can find available resources on the IRS website in English, Spanish, Chinese (simplified), Chinese (traditional), Korean, Russian, Vietnamese, and Haitian Creole.

7 Reasons Not To Engage With Scammers, No Matter What Your Friends On Facebook Tell You

August 3, 2020

Earlier this week, I received complaints that our law firm was dialing random numbers. We followed up with our phone company and were advised that scammers were most likely masking or spoofing our number. The phone company filed a complaint with the authorities and advised us to report any further activity.

Of course, we aren’t the only businesses affected by phone scams. The Internal Revenue Service (I.R.S.) has repeatedly warned about phone scams, including impersonation scams involving phishing or spoofing. It’s not surprising that taxpayers are getting fed up with these scams: since October 2013, the Treasury Inspector General for Tax Administration (TIGTA) has received complaints from more than 2.5 million people who have reported to TIGTA that they have received an impersonation call. More than 15,800 victims have reported that they paid the criminal impersonators a total amount of more than $80 million.

And when it comes to all scam calls – even those not related to the I.R.S. impersonation scams – the F.T.C. reported that consumers lost more than $285 million in November of 2019.

As the calls get more pervasive, taxpayers have offered advice about the best ways to deal with the scammers. Many of these same taxpayers have posted tips on Facebook and other social media for dealing with scammers. The advice ranges from blowing whistles in the phone to trying to “catch” the scammers at their own game by challenging their questions. Many of those same pieces of advice are being re-posted as though they might be effective. They are not. The best advice? Hang up. Don’t engage. Why not? Here are seven reasons why those tips don’t work and why you should never engage with scammers:

When you engage with a scammer – even if you are blowing a whistle in the phone – you’ve just confirmed two pieces of information for the scammers: they’ve called a working phone number AND you’ll answer the phone. Why does this matter? Because stealing money from taxpayers is only one part of the equation. Remember that identity theft isn’t just about getting money out of you once or stealing a tax refund check, it’s an entire industry. Your data typically isn’t getting stolen in one fell swoop: your identity profile is being put together piece by piece. Key bits of information about you may be stored, repackaged, and sold from one scammer to the next. The fact that you answered the phone and were willing to engage? That’s valuable to scammers who might try it again later – or sell your number to the highest bidder.
When you tell scammers to stop calling you, you may inadvertently give out more information about your phone number. When you offer comments like “stop calling my house” or “don’t call me at work” or “this is my cell phone,” you’ve just added to the database. Not only do the scammers know that it’s a good number, and you’ll answer (see #1), you’ve now offered up more details about the number the scammer just called (i.e., it’s your house, workplace or cell number). If they’re simply calling off of a stolen call list, you’ve just made your phone number more valuable.
When you tell scammers that you know you don’t owe anything, you might have confirmed your name, that you’re a taxpayer, and worse, possibly your Social Security Number (SSN). Remember, this isn’t some kid calling with a script: these are professional thieves who likely do this for a living. They know how to get what they want. It can be easy to give out or confirm additional information even if you don’t intend to. For example, if a scammer says, “Our records indicate that Kelly Erb with SSN 123-45-6789 owes $5,400,” and I reply, “That’s not true, I always pay my taxes,” I might have inadvertently offered up more information. Not only does the scammer now know that my phone number is good (see #1), they have a name to attach to it. And since I automatically didn’t say, “That’s not my Social Security Number,” that may indicate that they have the right SSN, too. So now they might have the name and SSN of a taxpayer who claims to be current: that strongly suggests that I have a job or other taxable income and that I have enough in assets to pay my bills regularly. I just became an even more valuable commodity to the scammer.
If you hesitate, you may give the scammers an opening. The entire point of calling you is to solicit information. If you hesitate, that might be the opening that the thieves are waiting to try and trick you. The longer you stay on the phone, the more likely you are to inadvertently say or reveal something that gives the thieves an “in.” Hanging up quickly is a better idea.
When you make threats back, you might be offering valuable “out of wallet” information. It may be tempting to bring out the big guns like “I’ll get you, I’m a lawyer” or “How dare you, my dad is a cop” or “Just wait until my Army husband, Bill, gets home.” But think about what you’ve just said. Yes, more information about yourself. Those additional nuggets are helping form your profile. As law enforcement told me, pieces of data are matched to other data. Suddenly, you’re no longer just a random phone number. You’re Jane Smith, SSN 123-45-6789. You’re a lawyer, and your dad is a cop. You live at 123 Elm Street, Anytown, USA 12345 (since that address matches your phone number). Your spouse’s name is Bill, and he works for the government. That data – especially once it’s been paired with more data which can be found in other places, such as social media sites or from a recent hack – is incredibly valuable.
You might be breaking the law. But they called you, right? It might not matter. Under federal law, you can record phone calls with the consent of just one party to the call (18 U.S.C. § 2511). That’s also the law in most states: you can record a phone call or conversation so long as you are a party to the discussion. If you are not a party to the conversation, you can record a conversation or phone call only if at least one party consents and has full knowledge that the communication will be recorded. The statute also prohibits recording conversations with criminal or tortious intent. But in 15 states (California, Connecticut, Delaware, Florida, Illinois, Maryland, Massachusetts, Michigan, Montana, Nevada, New Hampshire, Oregon, Pennsylvania, Vermont, and Washington), you need the consent of both parties to record a call. There are exceptions to these rules for law enforcement investigations, emergency situations, or certain unlawful activities: scammers should fall into the latter category, but the rules aren’t always clear. I’m sure you’ve noticed that in the myriad of advice handed out from I.R.S., TIGTA, and other law enforcement, it does not include recording the call. If you haven’t been directed to record the call, don’t engage, and don’t record.
You’re never going to make them feel bad. I know that it makes you feel better to tell off a scammer, but at the end of the day, it doesn’t bother them. Understand that these people are thieves. They are preying on vulnerable people – typically the elderly, students, and immigrants – who they can bully. They often use threatening language to scare taxpayers into giving up information or money: in one instance, an older victim was so distraught as a result of threats from the scammer that he crashed his car on the way to pick up a wire. These are not nice people. Your threats, bad language, telling them off? They’ve likely heard – and said – worse. You’re not fazing them one bit. Don’t waste your time.

It’s important not to give away any personal information. Once identity thieves have your info, they can access your bank account, charge your credit cards, and open new accounts in your name. An identity thief can also file a tax refund in your name to get a bogus refund. It’s important not to play along. Don’t pick up calls from numbers you don’t recognize, and don’t trust caller I.D. (trust me: as we’ve learned firsthand, technology allows scammers to spoof businesses and government agencies). And never – ever – transfer money to a government agency by wire or gift card.

Rather than rely on tips from your Facebook friends, here’s advice from the professionals (I.R.S., TIGTA and law enforcement) about how to best deal with the scammers: If you receive a call from someone claiming to be from the I.R.S., and you do not owe tax, or if you are immediately aware that it’s a scam, don’t engage with the scammer and do not give out any information. Just hang up.

If you receive a phone call from someone claiming to be with the I.R.S., and you owe tax or think you may owe tax, do not give out any information. Call the I.R.S. back at 1.800.829.1040 to find out more information.

You can also contact TIGTA to report scam calls by calling 1.800.366.4484 or by using the “I.R.S. Impersonation Scam Reporting” form on their website. You may also want to report the scam to the Federal Trade Commission by using the “F.T.C. Complaint Assistant” to report persons pretending to be from the government; please add “I.R.S. Telephone Scam” in the notes.

The F.T.C. has even made a video about how to handle these kinds of calls:

And while it won’t stop scammers, you can sign up on the National Do Not Call Registry to block telemarketers. Thirty-one days after your sign up, you can file a complaint against telemarketers that continue to call.

Don’t fall for the tricks. Keep your personal information safe by remaining alert. For tips on protecting yourself from identity theft-related tax fraud, click here.

IRS Warns Taxpayers On COVID-19 Scams

June 8, 2020

According to Johns Hopkins, the United States has confirmed nearly two million cases of COVID-19. With many businesses closed and taxpayers still waiting on stimulus checks, scammers are capitalizing on the shaky economic climate to cheat and steal. The Internal Revenue Service (IRS) is reminding taxpayers to be on guard against tax fraud and other related financial scams related to the pandemic.

Some COVID-19 related scams have been circulating for months. In particular, the IRS Criminal Investigation Division (IRS-CI) has been made aware of various schemes targeting Economic Impact Payments (EIPs, or stimulus checks). Some of these scams suggest that you can get more money from the government – or get your stimulus check faster – if you share personal details and pay a small “processing fee.” That’s not true: there are no shortcuts (paid or otherwise) to stimulus checks.

“Criminals seize on every opportunity to exploit bad situations, and this pandemic is no exception,” said IRS Commissioner Chuck Rettig. “The IRS is fully focused on protecting Americans while delivering Economic Impact Payments in record time. The pursuit of those who participate in COVID-19 related scams, intentionally abusing the programs intended to help millions of Americans during these uncertain times, will long remain a significant priority of both the IRS and IRS-CI.”

IRS-CI has received reports of phishing schemes being sent via emails and texts and through the regular mail. These schemes use keywords like “Corona Virus,” “COVID-19,” and “Stimulus” and are an effort to get your personally-identifying information (PII) or financial account information. According to IRS-CI, most of the new schemes are actively playing on the fear and unknown of COVID-19, as well as concerns about the stimulus payments.

Driving some of these schemes? Rumors. They’re believable because there’s a thread of truth to them. For example, like many other tax professionals, I’ve been receiving numerous inquiries about a second stimulus check. There is no second stimulus check in the works. There has, however, been talk about a second stimulus package, and the House even passed the HEROES Act, which did include a proposal for an additional check. But, as of now, the Senate still hasn’t taken up the HEROES Act. That still hasn’t prevented folks from suggesting that there is a second check (again, there isn’t) and trying to convince others that they need to “apply” for a second check or otherwise take steps to secure one.

Criminal solicitations aren’t limited to stimulus checks. IRS-CI is also reporting the organized selling of fake at-home COVID-19 test kits, as well as offers to sell fake cures, vaccines, pills, and advice on unproven treatments. Other scams purport to sell large quantities of medical supplies through the creation of fake shops, websites, social media accounts, and email addresses where the criminal fails to deliver promised supplies after receiving funds. (I probably receive at least 10 or so such solicitations per day.)

“Criminals try to take advantage of our most vulnerable times and our most vulnerable populations. But because we have seen many of these criminals and schemes before, we know how to find them, and we know how to expose them,” said Don Fort, Chief of IRS Criminal Investigation. “And because COVID-19 is a global problem, it requires a global solution. Not only are we leveraging our financial investigative expertise domestically, we are working hand-in-hand with our J5 partners on those COVID-19 cases that cross borders. There truly is no place for criminals to hide.”

Other COVID-19 related scams involve setting up fake charities soliciting donations for individuals, groups, and areas affected by the disease. Remember that you always check on a tax-exempt organization’s federal tax status by using the IRS online tool here.

Some criminals also offer opportunities to “invest” early in companies working on a vaccine for the disease, which promises a dramatic return on investment. According to IRS-CI, these promotions are often styled as “research reports,” make predictions of a specific “target price,” and relate to micro-cap stocks, or low-priced stocks issued by the smallest of companies with limited publicly available information. Be wary of any company that reaches out to you directly about investments. The U.S. Securities and Exchange Commission (SEC) regulates how some companies can solicit funding (even certain kinds of crowdfunding), so if you’re not sure about the validity of an offer, ask for documentation and check with your legal advisor.

You can report COVID-19 scams to the National Center for Disaster Fraud (NCDF) Hotline at 1.866.720.5721 or through the NCDF web Complaint Form. The NCDF works within the Department of Justice’s Criminal Division to improve the detection, prevention, investigation, and prosecution of criminal conduct related to natural and man-made disasters and other emergencies, such as COVID-19. Hotline staff will obtain information regarding your complaint, which will then be reviewed by law enforcement officials.

You can also report fraud or theft of your stimulus to the Treasury Inspector General for Tax Administration (TIGTA) via their website.

Finally, you can use always report phishing attempts to the IRS. If you receive an unsolicited email or social media attempt that appears to be from the IRS or an organization linked to the IRS (like the Electronic Federal Tax Payment System, or EFTPS), you should forward it to phishing@irs.gov.

If in doubt, assume it’s a scam. Don’t engage with scammers – even if you think you have the upper hand.

Treasury Warns Taxpayers On Stimulus Check Related Scams

May 14, 2020

J. Russell George, the Treasury Inspector General for Tax Administration (TIGTA), is urging all taxpayers to stay alert to ensure that they do not lose their Economic Impact Payments (EIPs), also called stimulus checks, to thieves and scammers.

TIGTA is responsible for conducting statutory oversight of issues relating to federal tax administration. As such, it regularly investigates fraudulent activity related to financial distributions of funds, including stimulus checks.

Depending on your circumstances, you will receive your stimulus payment by direct deposit, Direct Express debit card, or by paper check. With so many payments being distributed in various forms across the country, TIGTA reminds taxpayers to exercise caution to avoid becoming victimized by thieves and scammers.

You can check the status of your check with the “Get My Payment” tool on the Internal Revenue Service (IRS) website. Do not use any other websites or service that claim to be able to process your check or act as an intermediary between you and the IRS. If in doubt about whether a link can be trusted, the best practice is to manually type “IRS.gov” into your web browser.

Don’t open attachments or click on any links within e-mails from senders you do not recognize even if they claim that you must do so to collect your payment (that’s not true). Do not provide your username, password, date of birth, Social Security Number, financial data, or other personal information in response to an e-mail or robocall.

Additionally, don’t share personal information with anyone, whether claiming to be from the IRS or another business or agency offering to assist you with your stimulus check. That includes your online banking username or password. The IRS does not need your online banking username and password to send your check.

Payments will come directly from Treasury, and not any other agency. Scammers may try to convince you to deposit fraudulent checks in your name or in others’ names into your bank account. Once you deposit the funds, the scammers may request that you send money to another account, or use the funds to purchase pre-paid cards. Don’t fall for the tricks, and do not accept or deposit any stimulus payment that someone else offers you other than one received directly from the Treasury through the U.S. mail.

After your payment has been sent, the IRS will send you a letter confirming your payment. If you receive this letter but have not received your payment, please report the missing payment to TIGTA. The TIGTA form is intended for reports relating to stolen payments; you will also need to report the missing payment separately to the IRS. Please do not use the TIGTA form for issues related to direct deposits which were not routed correctly, or were not the correct amount.

You can contact TIGTA to report any potential fraud or scams involving the IRS on our website at TIPS.TIGTA.gov. You can also call TIGTA at 1-800-366-4484. Additionally, you can forward any unsolicited e-mail claiming to be from the IRS to phishing@irs.gov (and then delete it).

Watch Out For Stimulus Check Scams And Related Hoaxes

March 28, 2020

Ugh. The ink is barely dry on the “Coronavirus Aid, Relief, and Economic Security Act” or the “CARES Act” – and scammers are already coming up with schemes to defraud taxpayers. Specifically, identity thieves are using confusion over the stimulus checks to convince potential victims to turn over personally-identifying information.

The Better Business Bureau is already reporting that government imposters are calling about COVID-19 relief. As part of the scam, callers suggest that you might qualify for a special COVID-19 government grant and that it’s necessary to first verify your identity and process your request. Variations on the scheme involve contacts through text messages, social media posts, and messages.

Other twists on the scam suggest that you can get more money from the government – or get your stimulus check faster – if you share personal details and pay a small “processing fee.” Don’t take the bait. Stimulus checks are free money from the government. You don’t need to spend money to receive your check. And there are no short-cuts – even for a fee.

The Internal Revenue Service (IRS) will deposit your check into the direct deposit account you previously provided on your tax return (or, in the alternative, send you a paper check). The IRS will not call and ask you to verify your payment details. Do not give out your bank account, debit account, or PayPal account information – even if someone claims it’s necessary to get your stimulus check. It’s a scam.

If you receive a call, don’t engage with scammers or thieves, even if you want to tell them that you know it’s a scam, or you think that you can beat them. Just hang up. If you receive texts or emails claiming that you can get your money faster by sending personal information or clicking on links, delete them. Don’t click on any links in those emails.

Reports are also swirling about bogus checks. If you receive a “stimulus check” in the mail now, it’s a fraud – it will take the Treasury a few weeks to mail those out. If you receive a “stimulus check” for an odd amount (especially one with cents), or a check that requires that you verify the check online or by calling a number, it’s a fraud.

If you’ve spotted a scam, you can report it to BBB.org/ScamTracker. Your report can help others avoid falling victim to scams.

The Federal Communications Commission (FCC) is also receiving reports of potential scams, warning on its website:

Many consumers will receive checks as part of the federal government response to the coronavirus. No one will call or text you to verify your personal information or bank account details in order to “release” the funds. The Treasury Department expects most people to receive their payments within three weeks, via direct-deposit information the department has on file from prior tax filings.

The FCC also warns that “Small businesses are also getting scam calls about virus-related funding or loans and online listing verification.”

Don’t buy the lies. Be cautious if you’re being pressured to share any information or make a payment. The FCC also advises: If you think you’ve been a victim of a coronavirus scam, contact law enforcement immediately.

When it comes to the IRS and taxes, remember that the IRS will never:

Call to demand immediate payment over the phone, nor will the agency call about taxes owed without first having mailed you a bill.
Threaten to immediately bring in local police or other law-enforcement groups to have you arrested.
Demand that you pay taxes without allowing you to question or appeal the amount they say you owe.
Require you to use a specific payment method for your taxes, such as a prepaid debit card, gift card, or wire transfer.
Ask for credit or debit card numbers over the phone.

When in doubt, assume it’s a scam. You can find more tips on protecting yourself from identity-theft-related tax fraud here.

Again, you don’t have to do anything (other than perhaps file a previously unfiled tax return) to qualify for your stimulus check. There’s no need to sign up or call the IRS: you can find more information – when the IRS makes it available – at www.irs.gov/coronavirus. We’re already in the midst of a crisis: don’t become an additional victim.

Social Security Warns On New Texting Scam

March 11, 2020

Scammers aren’t just relying on robocalls and voice mails to reach potential victims: they’re now texting. The Inspector General of Social Security, Gail S. Ennis, recently issued a warning about a new scam involving text messages that appear to come from Social Security. The texts warn about a Social Security number problem and ask the recipient to call a number to resolve the issue and avoid legal action.

This is a trick by identity thieves hoping to steal money and personal identifiable information (PII). Like the Internal Revenue Service (IRS), the Social Security Administration(SSA) will never send a text asking for a return call to an unknown number.

However, SSA may send text messages if you have requested or subscribed to receive updates and notifications from SSA by text, or as part of Social Security’s enhanced security when accessing your personal my Social Security account (two or multi-factor verification).

And, like the IRS, the SSA will never:

Threaten you with arrest or other legal action unless you immediately pay a fine or fee.
Require payment by retail gift card, wire transfer, internet currency, or by mailing cash.
Send official letters or reports containing your personal information via email.

Also, the SSA will never promise a benefit increase or other assistance in exchange for payment.

If you owe money to the IRS or SSA, you’ll receive a letter with payment options and appeal rights. According to SSA, you should never pay a government fee or fine using retail gift cards, cash, internet currency, wire transfers, or pre-paid debit cards. You can find out more about IRS payment options here.

Inspector General Ennis has designated March 5, 2020, as National “Slam the Scam” Day to educate every American about these sinister scams. You can learn more at the SSA OIG website.

You can also join Inspector General Ennis and Monica Vaca, Associate Director, Consumer Response and Operations at the Federal Trade Commission, for a special joint Facebook Live. It’s called “Slam the Scam: That call is not from Social Security,” and starts at 7:00 p.m. E.T. on March 5, 2020.

When in doubt, assume it’s a scam. If you’re not sure whether a call is legitimate, hang up and call back using an official number (don’t just use the caller I.D. number on your phone since those can be spoofed). To reach IRS, call 1.800.829.1040. To contact Social Security, call 1.800.772.1213.

If you know for sure that it’s a scam, don’t engage with scammers or thieves, even if you want to tell them that you know it’s a scam, or you think that you can beat them. Just hang up or delete the email. You can find more tips on protecting yourself from identity-theft-related tax fraud here.

And one more thing: the SSA encourages you to please share scam awareness information with friends and family to help them avoid becoming victims.

ID Thieves Are Emailing Fake Tax Forms To Taxpayers

February 23, 2020

Don’t be fooled: it’s not just Social Security Administration (SSA) scams making the rounds. Tax scam emails are flying fast and furious as well. I’ve gotten a few, including the following:

The relevant text reads:
Attention,

Our records indicate that you are a Non-Resident Alien and sometime in the past submitted a form W-8BEN for your Tax exemption status and withholding, your form may have exceeded its succeeding calendar year and therefore has expired.

As a result you are to complete the attached revised W-8BEN form and send back to us as soon as possible.
Attach a copy of your identification (passports, driver’s license etc) when returning your filled form.

This is an identity theft scam email. In the scam, criminals use a fake form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (form downloads as a PDF) to gain personal and bank identification from taxpayers. Some versions of this scam have been circulating for more than ten years (downloads as a PDF). The IRS issued several warnings about the fraud over the years, including in 2017 and again in 2018. I guess for the scammers, old habits die hard.

Here’s how it works. The scammers send a letter to a taxpayer stating that they may be exempt from withholding and reporting income tax. However, the letter advises that the taxpayer needs to authenticate their information by filling out and returning a form W-8BEN – only the attached form W-8BEN and accompanying instructions are fakes.

The form W-8BEN is a legitimate tax form. It’s used by non-resident aliens who receive certain kinds of income. It’s typically executed to establish that you are not a U.S. person. For withholding purposes, it may also be used to claim a tax-treaty related reduced rate or exemption from withholding as a resident of a foreign country.

The top of the real form W-8BEN – including all of Part I – looks like this:

In contrast, the fake form W-8BEN looks like this:

You’ll note that the “newly revised” fake form W-8BEN asks for personal details such as your mother’s maiden name, your passport number, and deposit information. The email also asks you to attach copies of documents, like your passport and driver’s license, verifying your personally-identifying information.

The fake form specifically targets non-residents, but the scammers cover all of their bases for other taxpayers in the fraudulent instructions which are attached. The fake instructions look like this:

Those instructions, which purport to be revised as of February 2020, advise, among other things:

If you are a USA Citizen and resident, this form W-8BEN is not meant for you, please indicate “USA Citizen/Resident” on the form and return it to us. We shall then send you the appropriate form

Don’t click on the attachments, and just delete the email. Whether you’re a non-resident or resident, it’s bogus.

There are a couple of hints that indicate that this is a fake email:

The Internal Revenue Service (IRS) will not reach out to you via email.
The IRS would not direct you to return documents via email, especially to a non-government (.gov) address. The fake form advises you to send information to irsupdate@sawchukbrown.co.
There are several grammar errors on the form, including the question, “How often do you come to USA and when did you arrived last?”
There is inconsistent information on the form, including a note that this form W-8BEN is for individuals only and that “Entities must use Form W-8BEN.”

Also, remember that the IRS will never:

Request banking information, PIN codes, or passwords.
Call to demand immediate payment over the phone, nor will the agency call about taxes owed without first having mailed you a bill.
Threaten to immediately bring in local police or other law-enforcement groups to have you arrested for not paying.
Demand that you pay taxes without allowing you to question or appeal the amount they say you owe.
Require you to use a specific payment method for your taxes, such as a prepaid debit card, gift card, or wire transfer.
Ask for credit or debit card numbers over the phone or email.

If you are a victim of an IRS impersonation scam, you should report it to the Treasury Inspector General for Tax Administration at its IRS Impersonation Scam Reporting site and to the IRS by emailing phishing@irs.gov with the subject line “IRS Impersonation Scam.”

Scammers & Robocallers Dial-Up ID Theft Efforts

February 23, 2020

Yesterday, I received a slightly garbled voice mail advising me that I had a serious delinquency that needed to be resolved. I was told to call a 1-800 number to resolve the matter. I didn’t even have to check my Caller ID to know that it was a scam involving Social Security. This wasn’t my first call like this – but the frequency has definitely picked up. Friends and colleagues have ramped up complaints on social media about the calls in recent weeks.

This isn’t a new problem for much of the country either. In 2018, then-Acting Inspector General of Social Security, Gale Stallworth Stone, issued a warning about an ongoing phone scam from thieves pretending to be from the Social Security Administration (SSA).

As part of the con, scammers try to convince you to give up personal information, like Social Security numbers and bank account numbers, over the phone. In another case, a caller claims to be from “SSA headquarters” and asks you to confirm personal information, such as an SSN, “new” Medicare number, address, and date of birth.

So why are the calls picking up now? Scam-related calls seem to increase around tax season. Taxpayers are busy, the post-holiday lull at work has faded, and many folks are looking for information about tax refunds. Scammers know that a busy schedule and a scramble for tax and retirement-related information means that taxpayers may be more likely to pick up the phone.

Of course, many of these calls are “robocalls” or automated calls. In one robocall version of the scam, a computerized recording declares that your Social Security number (SSN) “has been suspended for suspicion of illegal activity,” and advises to contact a specific phone number immediately. In another version – the one I received – you’re notified that there’s a problem with your Social Security account because of a serious delinquency. The robocall or caller may also warn that if you don’t call back, your assets or benefits will be frozen until your alleged issue is resolved.

Robocalls from scammers pretending to be from government agencies like the Social Security Administration and the Internal Revenue Service (IRS) continue to be a problem. In fact, phishing scams and identity theft concerns remain atop the IRS’ 2019 “Dirty Dozen” list of tax scams.

To address the problem, a “Robocall Strike Force” was established in 2016. The task force was made up of communications companies, including cell and landline service providers, phone manufacturers, operating system developers, and the Federal Communications Commission (FCC). According to an FCC spokesperson, “This industry-led effort produced two detailed reports to the Commission and which were instrumental in laying the groundwork for both ongoing FCC policy-making efforts and industry technological work.” The spokesperson advised in 2018, “The Commission continues to consult with a wide variety of stakeholders though there are no current plans to formally reconvene this group. Rather, the Strike Force’s reports served their purpose by spurring and framing ongoing Commission and industry action to help consumer avoid illegal robocalls.”

In the meantime, robocalls and phone calls made by scammers and thieves continue to plague taxpayers. It’s especially confusing because the IRS has repeatedly advised taxpayers that they will not reach out by phone to resolve taxpayer issues. However, SSA employees do occasionally reach out by telephone for customer-service purposes. Further, the SSA says that in “a few limited special situations” which are “usually” already known to the citizen, an SSA employee may confirm personal information over the phone.

The SSA advises that if you receive a suspicious call from someone alleging to be from SSA, report that information using 1.800.269.0271.

When it comes to the IRS and taxes, remember that the IRS will never:

Call to demand immediate payment over the phone, nor will the agency call about taxes owed without first having mailed you a bill.
Threaten to immediately bring in local police or other law-enforcement groups to have you arrested for not paying.
Demand that you pay taxes without allowing you to question or appeal the amount they say you owe.
Require you to use a specific payment method for your taxes, such as a prepaid debit card, gift card, or wire transfer.
Ask for credit or debit card numbers over the phone.

When in doubt, assume it’s a scam. If you’re not sure whether a call is legitimate, hang up and call back using an official number (don’t just use the caller ID number on your phone since those can be spoofed). To reach IRS, call 1.800.829.1040. To contact Social Security, call 1.800.772.1213.

If you know for sure that it’s a scam, don’t engage with scammers or thieves, even if you want to tell them that you know it’s a scam, or you think that you can beat them. Just hang up. You can find more tips on protecting yourself from identity-theft-related tax fraud here.

Identity Thieves Targeted Students & The Dead In Tax Refund Fraud Scheme

February 12, 2020

Two Florida men will spend time in federal prison for their roles in a stolen identity and tax refund fraud scheme. The men took thousands of names, addresses, and other personally identifiable information and used the data to file fraudulent tax returns between 2012 and 2014.

The men were discovered as part of a collaborative law enforcement program called “Project EFIN.” The program focused on Electronic Filing Identification Numbers (EFIN) with high rates of identity theft. Providers – either individuals or firms – need an EFIN to file tax returns electronically with the Internal Revenue Service (IRS). An EFIN is different from a Preparer Tax Identification Number (PTIN) issued to tax professionals who are paid to file tax returns. Most preparers need both.

The program identified 100 of the largest EFIN holders based on fraud indicators like 100% refund rates and high rejection rates. Investigators pegged approximately 60 EFIN holders who claimed roughly $150 million in fraudulent returns for the tax years 2011 and 2012, and 62 EFIN holders who claimed more than $138 million in fraudulent returns for the tax year 2013.

As part of the investigation, law enforcement was able to link potentially problematic EFIN numbers to IP addresses. Using a subpoena, they found that one of those IP addresses was registered to a company called Capital Financial Management, LLC (“Capital”). Among other things, Capital provided tax preparation services.

According to court documents, Ludrick Joseph worked for Capital. Maurice Marcellus was the manager and sole registered agent of the company and ran the day-to-day operations. Between 2012 and 2014, Joseph and Marcellus prepared and electronically filed federal tax returns for individuals who were later determined to be identity theft victims.

In 2014, law enforcement executed a search warrant at Capital. They seized debit cards, files, and other records containing thousands of names and personally identifiable information like addresses and Social Security numbers. Included in the data were the names of people who Joseph allegedly knew to be deceased. Also on the lists? Students who had previously attended the ATI College of Health in Miami, Florida. Marcellus accessed the information while he was an academic advisor for the ATI College of Health (the college closed in 2012): he passed the data along to Joseph so that he could file fraudulent tax returns.

After a lengthy investigation, a federal grand jury indicted Marcellus and Joseph on February 14, 2019. The pair pleaded guilty on November 13, 2019, to aggravated identity theft and possession of unauthorized access devices.

U.S. District Judge Marcia G. Cooke sentenced Marcellus to 60 months and three years of supervised release. Joseph was sentenced to 48 months and three years of supervised release. Both defendants are jointly responsible for paying $563,210 in restitution.

The sentence was announced by Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, and Michael J. De Palma, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Miami Field Office. Other agencies involved in the efforts include the Federal Bureau of Investigation (FBI), U.S. Secret Service (USSS), U.S. Immigration and Customs Enforcement Homeland Security Investigations (ICE-HSI), and the U.S. Postal Inspection Service (USPIS).

The pair are slated to report to prison next month.

The story is a good reminder that identity thieves are constantly looking for ways to steal the identities of taxpayers. Keep your personal information safe by remaining alert – and when in doubt, assume it’s a scam. For tips on protecting yourself from identity theft-related tax fraud, click here.