Scam of the day – June 30, 2017 – Government agency criticizes IRS for failure to protect victims of identity theft

It was just a little over two weeks ago that I complimented the IRS for actions it was taking in regard to resolving the claims of victims of income tax identity theft as announced in a report by the Treasury Inspector General for Tax Administration (TIGTA).  Unfortunately, a newly issued TIGTA report about employment related identity theft found the IRS is doing a miserable job of protecting innocent victims of this type of fraud.

Employment related identity theft occurs when someone steals your Social Security number for purposes of getting a job.  The victim does not generally learn about the crime until they are notified by the IRS that they did not include all of their income on their income tax return.  The recent TIGTA report found that the IRS’ procedures for both identifying the phony returns filed by the identity thieves and its procedures for helping the victims whose Social Security numbers had been stolen and used  were seriously lacking.  In particular,  TIGTA concluded that 548,968 victims of this type of crime were not being properly helped by the IRS.

TIPS

TIGTA made seven specific recommendations to the IRS as to steps it should be taking, including developing procedures to notify parents of children whose Social Security numbers had been stolen and used for employment related identity theft, however, the IRS did not agree with five of the recommendations, leaving victims in danger and with less help from the IRS than they should receive.

The best thing that anyone can do to protect themselves from becoming a victim of identity theft is to keep your Social Security number as private as possible.  Don’t give it as an identifier to anyone or any company that asks for it unless you are legally required to do so.  For example, your doctor or dentist does not need your Social Security number although many ask for it.  The more places that have your Social Security number, the greater your risk of identity theft.

Scam of the day – June 14, 2017 – IRS improves its handling of income tax identity theft

Income tax identity theft, by which identity thieves file phony income tax returns with counterfeit W-2s using the Social Security number and name of their victims is still a major problem for the IRS and taxpayers costing us all billions of dollars each year.  However, when someone has stolen your Social Security number and filed an income tax return using your name, the problem becomes particularly personal.

In 2015 I reported to you about a report of the Treasury Inspector General for Tax Administration (TIGTA) in which it disclosed that despite IRS assurances to the contrary, it took the IRS an average of 278 days to resolve individual income tax identity theft cases and return the rightfully owed tax refund to the victimized taxpayer.  In a heartening example of some good news, TIGTA has recently reported that the IRS has lowered the time to resolve the income tax identity theft cases of individual taxpayers to 166 days, which, although to my mind, is still too long, is a significant improvement.

TIPS

Along with protecting the privacy of your Social Security number as much as possible, the best thing you can do to protect yourself from income tax identity theft is to file your income tax return as soon as possible in order to make sure your return is filed prior to that of an identity thief.  Income tax identity theft only works if the identity thief files a tax return before you do.

If you do find yourself a victim of income tax identity theft, you should file a police report immediately and then file a paper tax return with an attached Form 14039 Identity Theft Affidavit along with a copy of the police report to the IRS to hasten the process of recovering your tax refund.

Scam of the day – October 8, 2016 – Indian scam call center busted

India is a hub for call center support for many companies’ customer service.  It also is a center for phony IRS phone calls in which the caller, claiming to be an IRS representative, demands immediate payment of overdue taxes and threatens dire repercussions if the payment is not paid.  Earlier this week in India, police raided three buildings in a Mumbai suburb and arrested 70 people they allege to have managed approximately 600 people who made thousands of calls each day to the United States posing as IRS agents demanding money.  This particular call center had been operating for about a year before an informant went to police a few weeks ago.  Posing as the IRS, the scam call center sent out approximately 10,000 text messages to unsuspecting Americans prompting their victims to call the scammers who identified themselves as IRS employees named Christopher or Daniel.  Authorities are estimating that this particular IRS scam call center took in as much as $150,000 every day.

The Treasury Inspector General for Tax Administration (TIGTA) has received more than 1.7 million complaints about these kinds of calls  during the last three years and the real number of calls is certainly quite higher.

It was just last year that Sahil Patel was convicted of operating a similar IRS phony phone call scam using call centers in India.

TIPS

This scam is easy to avoid.  Don’t trust your Caller ID because using a technique called spoofing, a scammer can make his or her call appear to be from the IRS on your Caller ID.  Trust me, you can’t trust anyone.  The easiest way to recognize if a call from the IRS demanding money is a scam is to be aware of the fact that the IRS will never initiate contact with a taxpayer to collect overdue taxes by a phone call, email or text message.  Any such communication is from a scammer so you should just ignore it. Additionally, unlike the IRS, the scammers often ask that payments be made with iTunes gift cards, which is something that the IRS will never do.

Scam of the day – September 7, 2016 – IRS fails to notify identity theft victims

The IRS is certainly aware of the serious problems posed by identity theft which costs taxpayers billions of dollars in phony refunds paid to identity thieves filing income tax returns with fake W-2s in order to obtain fraudulent refunds.  This makes it more startling to recently learn from a report of the Treasury Inspector General for Tax Administration (TIGTA) that between 2011 and 2015, the IRS failed to notify more than a million taxpayers who had their Social Security numbers stolen even though the IRS was fully aware that these people were victims of employment related identity theft.  Employment related identity theft occurs when someone steals another person’s Social Security number in order to get a job.  Often this occurs when illegal immigrants use stolen Social Security numbers to get a job because they cannot legitimately obtain their own Social Security number.  The IRS becomes aware of the Social Security number being misused when the income tax returns filed using the Social Security number don’t match the W-2s associated with the Social Security number.

In 2014, the IRS instituted a pilot program by which it notified 25,000 people when their Social Security numbers were used by someone else to get a job, but the program was abandoned after a short time.  In April, the IRS indicated that it would begin to notify new victims of employment related identity theft beginning in January of 2017, however, in its report, TIGTA is recommending that the IRS institute procedures to notify not only people who become victims after January of 2017, but also everyone who had become a victim of employment related identity theft previously.  TIGTA also recommended to the IRS that it notify the Social Security Administration when it becomes aware of employment related identity theft.

TIPS

While the intention of the identity thief who commits employment related identity theft is not as nefarious as that of an identity thief who commits identity theft that causes unpaid debt to be incurred in the name of the victim, the dangers of employment related identity theft can easily turn into medical identity theft whereby your medical records become corrupted by the medical records of the identity thief or criminal identity theft whereby crimes are committed in your name.  The best thing you can do to prevent any kind of identity theft is to maintain the privacy of your Social Security number as much as possible.

Scam of the day – June 11, 2016 – New government report: IRS data breach worse than originally reported

Just a day after the IRS reopened its Get Transcript Online website, the Treasury Inspector General for Tax Administration (TIGTA) released a new study about the massive Get Transcript Online data breach that went from the beginning of 2014 to May 21, 2015 indicating it was far worse than the IRS had reported.  The Get Transcript Online program allowed taxpayers to get copies of their former income tax returns online.  TIGTA found that the IRS failed to identify 620,931 taxpayers whose information was potentially targeted by hackers.  TIGTA also found that 355,262 taxpayers actually were successfully hacked through the Get Transcript Online program although the IRS had initially acknowledged that “only” 220,000 taxpayers’ information was stolen.  The flaw in the program as operated in 2014 and 2015 was that too often the answers to personal questions required for verification purposes to gain access through the program to a taxpayer’s tax records were able to be obtained by identity thieves through data banks readily available to determined hackers.

TIPS

The IRS says that the program as now being operated has tougher requirements to enable access to a taxpayer’s account and records including a requirement of answering more personal questions including questions about credit card usage or loans taken out by the taxpayer.  In addition, the taxpayer requesting a copy of his or her records must have a valid email address and a smartphone enabled for text messages tied to the taxpayer’s name.  Whether these steps are indeed sufficient to stop hackers remains to be seen.

Scam of the day – May 26, 2016 – Five arrested in IRS impersonation scam

Earlier this week, five people were arrested in Miami and accused of impersonating the IRS and calling people on the phone, telling them that unless they wired money immediately, they would be arrested.  According to the Treasury Inspector General for Tax Administration (TIGTA) Jennifer Varino Nunez, Dennis Delgado Caballero, Arnoldo Perez Mirabal, Yaritza Espinosa Diaz and Roberto Fontanella Caballero swindled more than 1,500 victims out of approximately two million dollars using this scam.  Most of the criminals perpetrating this scam make the calls on their computers using Voice over Internet Protocol (VOIP) which is not only an easy and economical way to make the calls, but also is easier for hiding the origin of the call.  In addition, using VOIP makes it easier for the criminal to make the call appear to their victims’ Caller ID as if the call really originated with the IRS.

TIPS

This is an easy scam to avoid.  The IRS will never initiate a collection for overdue taxes by a telephone call.  In addition, they will never ask you to verify personal information over the phone nor ask for your credit card number or require you to immediately wire money to resolve the matter.  If you do get a call purporting to be from the IRS demanding payment of overdue taxes, you should just hang up.   If you believe you may indeed owe taxes to the IRS, you should call the IRS directly at 800-829-1040.  If you have become a victim of this scam, you should either report it by phone to the IRS at 800-366-4484 or report it by filling in the IRS Impersonation Scam Reporting form on line which you can get by clicking on this link.  https://www.treasury.gov/tigta/contact_report_scam.shtml

Scam of the day – November 30, 2014 – Prisoners receive 70 million dollars of refunds for phony income tax returns

Income tax identity theft is a huge problem, which last year alone cost the federal government and, by extension, we, the taxpayers, more than five billion dollars in refunds paid by the IRS to identity thieves filing phony returns, often using stolen Social Security numbers of innocent taxpayers.  However, according to a recent report by the Treasury Inspector General for Tax Administration (TIGTA), phony income tax returns filed by criminals who are already incarcerated cost the IRS more than seventy million dollars in 2012, the most recent year for which TIGTA had records.  Although the IRS noted that it had identified and prevented more than 100,000 phony refund-claiming income tax returns, TIGTA concluded in its report that “Tax refund fraud associated with prisoners remains a significant problem for tax administration.”  TIGTA also found that the IRS had failed to implement four of six recommendations of TIGTA in regard to reducing income tax fraud by prisoners.

TIPS

Income tax identity theft is a major problem.  In regard to tax refund fraud associated with prisoners, it is not known to what extent prisoners are filing fraudulent tax returns using the Social Security numbers of other people because the IRS has not, as required, reported to Congress in a timely basis reports that indicate the extent to which prisoners are filing fraudulent tax returns using the Social Security numbers of other people.  As for the rest of us, fraudulent income tax returns filed by identity thieves using stolen Social Security numbers is a major problem.  The key to protecting yourself from this threat is to file your income tax return as soon as possible in order to beat an identity thief to the punch and to protect the privacy of your Social Security number as much as possible.