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Scams Continue To Circulate

By Staff | Oct 20, 2009

No matter how many times a person can be warned about scams and get-rich-quick schemes, it never fails that someone will always end up getting caught in one of these never-ending scams. Some of the latest scams in the county are involving the name of the Internal Revenue Service, prompting warnings from the U.S. Department of the Treasury.

Today’s modern technology allows scammers to make their documents and communications almost impossible to identify from legitimate documents. Emails often contain the easily recognizable logos of major financial institutions or governmental agencies, making the communication look to be the “real deal.”

Regardless of the means of communication, the final goal of the criminals is the same – to obtain personal information in order to obtain access to financial accounts, such as savings or checking accounts and credit card accounts. Once a criminal has your personal information, they can clean out your accounts, or event go so far as to create fraudulent credit card accounts in your name, run up huge charges, and leave the victim holding a bill for something they had no knowledge of. In some extreme cases, criminals have taken a person’s information and filed false tax returns to gain refunds illegally from the government.

In these times of federal stimulus and revitalizing the economy, many scammers have been targeting potential victims by claiming to represent the Internal Revenue Service. So of the most recent IRS-related scams are explained as follows:

IRS FORM W-8BEN – The criminal alters a genuine IRS Form, the W-8BEN, or Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding. The altered form asks the victim to provide detailed personal and financial information, which could potentially include any passport information, bank accounts, spouse’s name, mother’s maiden name or other information, that could apply to financial accounts. The scammer can use the authentic IRS form, or they can even dream up a new form, such as W-4100B.

The form is usually emailed or faxed to the individual, and says that the recipient could face additional taxes unless they quickly fax or return the information required on the form sent by the scammer. Legitimate W-8BEN forms are required by the financial institution, not the IRS, and a legitimate form will never ask for a passport number or bank account numbers.

MAKING WORK PAY REFUND – A relatively new scam, this involves the recently enacted “Making Work Pay” provision, which allows for a tax credit available to workers, consumers and retires. The scam asks the victim to provide certain information to the “IRS”, which will lead to a refund being deposited in the person’s bank account.

The actual “Making Work Pay” provision is actually being received by taxpayers in the form of a credit in their paychecks from decreased withholding taxes. not as checks paid to bank accounts. Retirees and consumers who are not receiving wages do not receive this tax credit.

INHERITANCE, LOTTERY WINNINGS AND CASH CONSIGNMENTS – This is perhaps the most common scam being circulated. A victim receives notification from the Treasury Department to the effect that they will receive a substantial windfall from an inheritance, lottery payout or other mechanism if they provide the IRS with information through a reply email.

This scam may be a multi-part tactic, however, as the victim may respond to the initial email and receive a phone call at a later date or time, or further e-mails, instructing them to pay a tax on the alleged windfall in order to have the windfall released to them. A further variant of this scam is for the victim to receive a phony check that they are instructed to cash, but withhold 10 percent of the total to cover taxes and fees.

In every instance, the checks are fake and the victim is left with nothing, as well as being out the “taxes” they paid – not to the government, to the scammer.

TAX REFUND DUE YOU – This is one of the most common scams being purveyed at this time. A person receives an e-mail message that states that an IRS check of past records found the victim overpaid taxes. The victim is told to click on a link on the e-mail to access and complete the “official” claim form, which of course, requires personal information about the victim.

In another variation of this scam, the false e-mail comes from the IRS Exempt Organization division. Most of these messages contain the name of a fictional, or possibly even a real IRS employee, to make the message look more authentic and official.

The victim complies, waits for their refund, but in reality, the scammer gets the refund-in the form of cleaning out a bank account of the victim, using the financial information gained from the “official” claim form.

There are similar scams, such as communications from individuals looking for a “partner” to help get huge sums of money out of a country, or people with terminal illnesses looking for someone to “help” them give away money for philanthropic causes.

Authorities at all levels remind the public that if it seems too good to be true, it probably is. If you ever receive such a communication from the Internal Revenue Service, do some investigating on your own. Contact your tax preparer, or contact the IRS directly. You can also contact your local law enforcement agency about any concerns over possible fraudulent for scam e-mails or mailings. Authorities would rather investigate on the side of caution, rather than investigated someone’s loss of finances due to an illegal fraud or scam.