- The Washington Times - Wednesday, March 22, 2006

The Internal Revenue Service is warning consumers about digital and paper-based scams designed to steal their money as the April 17 filing deadline looms.

The agency, which has issued several alerts on the fraudulent use of its name or logo, updated its list last week to include more details on e-mail personal information “phishing” scams and a new type of paper fraud targeting nonresidents.

More than 68 million returns were filed electronically last year, the first time online filing outpaced paper, said IRS spokesman Jim Dupree. The agency is expecting a record 74.2 million Internet filings this year.

In a notice updated last week on its Web site (www.irs.gov), the agency outlined scams involving fraudulent IRS e-mail addresses and Web sites.

E-mail claiming to come from [email protected], [email protected] or similar addresses inform recipients they are eligible to receive a tax refund by using a link to a Web site. The site, a clone of the IRS home page, displays an interactive page that is similar to the real thing but has been modified to ask for personal and financial information the agency does not require.

The IRS does not send unsolicited e-mail or ask for detailed personal information, including personal identification numbers, passwords or other data needed to access credit card, bank or other financial accounts.

The Treasury inspector general for tax administration has found 12 Web sites in 18 countries hosting variations on the scheme, according to the IRS.

In another scam, a bogus IRS letter and Form W-8BEN (Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding) asks nonresidents to provide personal information. The legitimate IRS form, which is used by financial institutions to establish appropriate tax withholding for foreigners, does not ask for that information.

The Federal Trade Commission estimates that 10 million Americans have their identities stolen each year. In the agency’s annual report detailing consumer complaints about fraud, identity theft topped the list and accounted for more than 37 percent of the more than 686,000 complaints filed with the FTC last year.

“When in doubt, don’t trust,” said Jay Foley, co-founder of the Identity Theft Resource Center, a San Diego nonprofit organization.

Mr. Foley said his organization had not received any complaints about the IRS online-filing process, but has heard from consumers who have been sent postcards and letters purporting to come from the IRS that provide a number to call to answer questions about their returns.

“The IRS does not send postcards, and if they do send a letter, it will be by the case file number, not your Social Security number,” he said.

The nonprofit has received several complaints about tax-filing companies, including H&R; Block and Jackson Hewitt Tax Service, setting up kiosks in public places. Passers-by can read personal information from the company’s computer screen or overhear confidential information while the consumer is conversing with the tax preparer, Mr. Foley said.

H&R; Block encrypts all client data and its tax service kiosks are designed with higher walls and other security and privacy features, said spokeswoman Kate O’Neill Rauber.

“To the best of our knowledge, H&R; Block has not received a complaint from the Identity Theft Resource Center,” she wrote in e-mail yesterday. “If the organization has specific concerns, we encourage them to contact H&R; Block.”

Jackson Hewitt spokespersons did not return repeated calls for comment.


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