Posts Tagged ‘income tax fraud’

Winning The “War” Against Tax Scammers!

Tuesday, January 19th, 2016

The exclusive purpose for the information which is provided from this website is to disseminate information, and not to provide tax advice. 

There exists a multitude of methods to communicate with each other within the United States, and the world for that matter.  Some (myself included) would argue that we have lost our effectiveness in communicating verbally with each other, and with other members of our family.  Another  facet of this situation has evolved from others, with both fraudulent and criminal intentions, who seek to take advantage of technology to prey upon others for their own financial gain.  In many instances, they are successful.  Unfortunately, this also imposes a huge toll on the victims in terms of both financial losses, and emotional pain and suffering.  In my opinion, both can last years in duration.

The effects are compounded by the state of our global environment – the fact that many, many Americans do not feel secure or safe.  A recent report stated that the number is higher than 70%.  Anonymous (difficult to track or identify the source) communications are pervasive.  Many American use e-mails on a regular basis.  We provide our e-mail address to sellers, suppliers, contacts etc. on a regular basis.  These parties sell that information to other sources for their own financial gain.  The information is probably re-sold to other firms.  Our personal information and data is stored for years by entities with whom we have relationships – banks, retailers, the U.S. Government, financial institutions, credit card companies, etc.  Their security systems are susceptible to being penetrated (“hacked”) and the information is captured and used fraudulently by criminals.

The contacts which you will eventually encounter include, but are not limited to: threats (may be written or oral), “phishing”, “hostage” capture of your PC and data, “Trojan Horses”, identity theft, malware, viruses, fraudulent telephone calls, “hacking” etc.  In the past several years there has been a continuous year-over-year increase in the number of serious telephone scams.  The script can be one of several forms (i.e. from the IRS or from someone claiming to be from the police or hospital stating that your son or daughter has been in an accident and is near death, or that you have an unpaid claim from  someone who has now taken legal action against you, etc.)

This post is related to those which are related to situations in which the fraudster is claiming to be from the Internal Revenue Service (Federal or state).  The caller’s goal is to intimidate you and to escalate the tenor of the call to the point at which you believe all, or most of the statements that have been made to you, and you are willing to cooperate fully with the caller.  Their ultimate goal is to have you provide them with financial information that they will use to commit their fraud.

While I can not speak for all state taxing authorities within the United States, rest assured, the IRS will always initially communicate with you in writing.  Always ignore these fraudulent calls.  If you don’t know what to do, call 911, your CPA, your attorney, or a trusted friend or relative.

Tax Scams/Consumer Alerts

 

https://www.irs.gov/uac/Tax-Scams-Consumer-Alerts

 

Internal Revenue Service Warns of New Phone Scam

Thursday, November 7th, 2013

The exclusive purpose for the information which is provided from this website is to disseminate information, and not to provide tax advice.

IRS Warns of Phone Scam

 The IRS is warning the public about a phone scam that targets people across the nation, including recent immigrants. Callers claiming to be from the IRS tell intended victims they owe taxes and must pay using a pre-paid debit card or wire transfer. The scammers threaten those who refuse to pay with arrest, deportation or loss of a business or driver’s license.

The callers who commit this fraud often:

  • Use common names and fake IRS badge numbers.
  • Know the last four digits of the victim’s Social Security number.
  • Make caller ID appear as if the IRS is calling.
  • Send bogus IRS emails to support their scam.
  • Call a second time claiming to be the police or DMV, and caller ID again supports their claim.

The truth is the IRS usually first contacts people by mail – not by phone – about unpaid taxes. And the IRS won’t ask for payment using a pre-paid debit card or wire transfer. The agency also won’t ask for a credit card number over the phone.

If you get a call from someone claiming to be with the IRS asking for a payment, here’s what to do:

  • If you owe federal taxes, or think you might owe taxes, hang up and call the IRS at 800-829-1040. IRS workers can help you with your payment questions.
  • If you don’t owe taxes, call and report the incident to the Treasury Inspector General for Tax Administration at 800-366-4484.
  • You can also file a complaint with the Federal Trade Commission at FTC.gov. Add “IRS Telephone Scam” to the comments in your complaint.

Be alert for phone and email scams that use the IRS name. The IRS will never request personal or financial information by email, texting or any social media. You should forward scam emails to phishing@irs.gov. Don’t open any attachments or click on any links in those emails.

Read more about tax scams on the genuine IRS website, IRS.gov.

Additional IRS Resources:

IRS YouTube Video:

 

Cyber Crime = Identity Theft & Fraud

Thursday, February 21st, 2013

The exclusive purpose for the information which is provided from this website is to disseminate information, and not to provide tax advice.  

This is the fourth article on this subject which has been posted by me on this website (http://www.billseabrookecpa.com/blog/?s=identity+theft ).  Just as a fire needs air, heat, and fuel to exist,  in order for identity theft to occur, there has to be an unsuspecting victim, an account number, and a cyber-criminal.  It is beyond the scope of this article to present the multitude of scenarios that can or do facilitate identity theft.  However, the old adage “An ounce of prevention is worth a pound of cure” is certainly applicable. 

The nucleus of the identity theft situation is the “account number”.  Unfortunately, the most predominantly used account number is our Social Security account number.  Once a cyber-criminal has this number bank accounts and credit cards can be opened, financial transactions processed, identification cards created (fake driver’s licenses) etc.   

Additionally, cyber-criminals can fraudulently file a tax return using your account information and divert any refund which is due you to their own accounts.   There are several steps which you can follow to avoid becoming another “identity theft victim”: (more…)

Be Aware of These Tax Scams!!

Friday, February 17th, 2012

The exclusive purpose for the information which is provided from this website is to disseminate information, and not to provide tax advice.

This article addresses some of the more common tax scams that have already been identified from actual filed complaints.  However, there are others in existence.  For many different reasons, in some cases the victims have elected not to file a report or complaint.  In summary, there are far too many unscrupulous people in the United States whose main goal in life is to continuously engage in these activities.

Dirty Dozen Tax Scams

 

The Internal Revenue Service has issued its annual “Dirty Dozen” tax scams list, 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.

The Dirty Dozen listing, compiled by the IRS each year, lists a variety of common scams taxpayers can encounter at any point during the year. But many of these schemes peak during filing season as people prepare their tax returns.

Illegal scams can lead to significant penalties and interest and possible criminal prosecution. The IRS Criminal Investigation Division works closely with the Department of Justice to shut down scams and prosecute the criminals behind them.

Here are five of the Dirty Dozen tax scams for 2012:

Identity theft   In response to growing identity theft concerns, the IRS has embarked on a comprehensive strategy focused on preventing, detecting and resolving identity theft cases as soon as possible. In addition to the law-enforcement crackdown, the IRS has stepped up its internal reviews to spot false tax returns before tax refunds are issued and is working to help victims of identity theft refund schemes.

Identity theft cases are among the most complex ones the IRS handles, but the agency is committed to working with taxpayers who have become victims of identity theft.

The IRS is increasingly seeing identity thieves looking for ways to use a legitimate taxpayer’s identity and personal information to file a tax return and claim a fraudulent refund.

An IRS notice informing a taxpayer that more than one return was filed in the taxpayer’s name or that the taxpayer received wages from an unknown employer may be the first tip off the individual receives that he or she has been victimized. Anyone who believes his or her personal information has been stolen and used for tax purposes should immediately contact the IRS Identity Protection Specialized Unit. For more information, visit the special identity theft page on this website.

Phishing    These scams are typically carried out with the help of unsolicited email or a fake website that poses as a legitimate site to lure potential victims into providing 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 that can help you protect yourself from email scams.

Return preparer fraud    About 60 percent of taxpayers will use tax professionals this year to prepare and file their tax returns. Most return preparers provide honest service to their clients. But as in any other business, there are also some who prey on unsuspecting taxpayers.

Questionable return preparers have been known to skim off their clients’ refunds, charge inflated fees for return preparation services and attract new clients by promising guaranteed or inflated refunds. Taxpayers should choose carefully when hiring a tax preparer. Federal courts have issued hundreds of injunctions ordering individuals to cease preparing returns, and the Department of Justice has pending complaints against many others.

In 2012, every paid preparer needs to have a Preparer Tax Identification Number (PTIN) and must enter it on the returns he or she prepares.

Signals to watch for when you are dealing with an unscrupulous return preparer would include that they:

  • Do not sign the return or will not include a Preparer Tax identification Number on it.
  • Do not give you a copy of your tax return.
  • Promise larger-than-normal tax refunds.
  • Charge a percentage of the refund amount as preparation fee.
  • Require you to split the refund to pay the preparation fee.
  • Add forms to the return you have never filed before.
  • Encourage you to place false information on your return, such as false income, expenses and/or credits.

For advice on how to find a competent tax professional, see Tips for Choosing a Tax Preparer.

Hiding income offshore    Over the years, numerous individuals have been identified as evading U.S. taxes by hiding income in offshore banks, brokerage accounts or nominee entities and then using debit cards, credit cards or wire transfers to access the funds. Others have employed foreign trusts, employee-leasing schemes, private annuities or insurance plans for the same purpose.

The IRS uses information gained from its investigations to pursue taxpayers with undeclared accounts, as well as the banks and bankers suspected of helping clients hide their assets overseas. The IRS works closely with the Department of Justice to prosecute tax evasion cases.

While there are legitimate reasons for maintaining financial accounts abroad, there are reporting requirements that need to be fulfilled. U.S. taxpayers who maintain such accounts and who do not comply with reporting and disclosure requirements are breaking the law and risk significant penalties and fines, as well as the possibility of criminal prosecution.

“Free money” from the IRS & tax scams involving Social Security     Fliers and advertisements for free money from the IRS, suggesting that the taxpayer can file a tax return with little or no documentation, have been appearing in community churches around the country. These schemes are also often spread by word of mouth as unsuspecting and well-intentioned people tell their friends and relatives. Scammers prey on low-income individuals and the elderly. They build false hopes and charge people good money for bad advice. In the end, the victims discover their claims are rejected. Meanwhile, the promoters are long gone. The IRS warns all taxpayers to remain vigilant.

There are a number of tax scams involving Social Security. For example, scammers have been known to lure the unsuspecting with promises of non-existent Social Security refunds or rebates. In another situation, a taxpayer may really be due a credit or refund but the scammer uses inflated amounts to complete the return for a larger refund they’ll run off with.

These are some of the Dirty Dozen Tax Scams for 2012. For a complete list, see IRS Releases the Dirty Dozen Tax Scams for 2012.
Links:

YouTube Videos:

The Dirty Dozen English | Spanish | ASL