IRS SCAMs
IF YOU RECEIVED A TELEPHONE CALL OR MESSAGE LEFT FROM SOMEONE PROFESSING TO BE FROM THE I.R.S. HANG UP! PUSH DELETE! IT’S A SCAM! THE IRS ONLY SENDS LETTERS VIA THE U.S. MAIL TO CONTACT YOU. The IRS DOES NOT SEND EMAILS. The IRS NEVER CALLS you by phone, without first sending you a “snail” mail letter. These scams are trying to get your private information and money. DO NOT SEND MONEY. If they threaten to call the police hang up. HANG UP ANYWAY. PLEASE CALL ME if you have concerns.
IRS Warns Tax Pros about New Phishing Scheme
The Internal Revenue Service is sounding the alarm about a new scheme in which scammers send emails purporting to come from tax software companies, instead fooling tax preparers into clicking on a link that will load malware on their computers.
The email urges recipients to click on a link to download an important new software update and install it. The executable file has the same name as the legitimate tax software, but instead of providing an update, the link instead downloads a program that will track the tax preparer’s keystrokes, allowing criminals to steal passwords, logins and other sensitive information.
The IRS has seen only a handful of cases of the scam so far, but it is encouraging tax professionals to beware of such scams and never to click on unexpected links in emails. Similar email schemes using tax software names have targeted individual taxpayers, the IRS noted.
The IRS recently began a public awareness campaign to alert tax professionals about security threats and identity theft issues targeting the tax industry. The Protect Your Clients; Protect Yourself campaign urges tax professionals to beef up their security protections and realize they increasingly are targets of cybercriminals.
The IRS is asking all tax preparers to avoid clicking on links or open attachments in e-mails. Instead they should use a software provider’s main website to connect to them. Tax pros should also run a security “deep scan” to search for viruses and malware on their computers.
They should strengthen their passwords for both computer access and software access. Passwords should be at least eight digits long (although more is better) with a mix of numbers, letters and special characters.
Tax practitioners should instruct their staff members about the dangers of phishing scams, which can come in the form of emails, texts and calls. They should also review any software that employees use to remotely access the firm’s network or the firm’s IT support vendor uses to remotely troubleshoot technical problems and support the business’s systems. Remote access software is a potential target for hackers to take control of a computer.
IRS INDICATES THAT SCAM PHONE CALLS ARE ON THE RISE
In the past couple of years, people posing as the IRS, have been calling taxpayers claiming that they owe unpaid tax and demand that payment be made immediately. If you have not yet had the “luxury” of receiving one of these calls, consider yourself lucky.
The manner in which these scam artists attempt to collect payment varies, but you can be assured that the options they allow run the gamut. According to the IRS, these under-handed scam artists are now requesting that payment be made in the form of gift cards including cards from Apple’s iTunes.
It is not atypical for a scam-artist to have the potential victim’s name prior to the call. When first contacting the taxpayer, they will introduce themselves and mention a specific IRS problem and tie it to a precise amount owed. They will then explain that the time allowed to make the payment has lapsed beyond what is acceptable, and that payment must be made immediately. They then go on to explain that if payment is not made, serious action will be taken which may include losing one’s State ID, losing one’s passport, damaging one’s credit or being placed in jail.
If you have received a call from one of these deviants, it may be one in a long line of calls to come. I interviewed Josh B, a taxpayer from Los Angeles, California. To date Josh has received at least a dozen of these calls (see the end of this article to find a link to read the transcript from one of Josh B’s calls with a scammer). For Josh, the calls come once every few weeks. The scammers call his cell phone which allows him to see an incoming phone number. The calls appear to come in on a “Skype” type platform. They have a US area code originating from a non-major US city lying in a smaller US State. When Josh attempts to return one of these calls using the number provided, he is able to get through to the scammer for an hour or two and then the number is disconnected and becomes unreachable.
As you may have guessed or come to learn from experience, receiving these call can be frustrating or even worse, cost you money. The IRS suggests that if you receive one of these calls you hang up immediately and contact their IRS Impersonation Scam Reporting web page or call their hotline at (800) 366-4484. While this may be the prudent thing to do, Josh B chose to engage the scammers on his commute to work one day. By doing so, he was able to waste about 5 minutes of the scammers time, and at least temporarily kept them from scamming someone less savvy.
If you have about 5 minutes to spare, we highly recommend you read the transcript from Josh B’s call with the IRS scammer. Not only is it entertaining but you will gain a better idea of what to expect on one of these calls.
Transcript of Call from IRS Scammer with Josh B from Los Angeles, California…
Scammer:
So you never received anything showing $5,821.00 sir?
Josh B:
Christine had said there was an outstanding fee of $5,000 and asked me to go to the bank, so I just walked down the street and I’m down in Santa Monica. I don’t know what I’m supposed to do with that stuff.
Scammer:
Can I explain you once again sir?
Josh B:
Okay
Scammer:
Okay, we have audit of your taxes between the year of 2009 and 2014. And we find out that taxes amount to $5,821 which is late. Right now you owe $5,821 (..inaudible). Now, when the case will be done within the courthouse, your bank account will be seized, your credit report will be spoiled, your passport along with State ID will be seized.
Josh B:
Does this affect…my wife and I were about to lease a car…a Daihatsu and were at the dealership tonight. Is this going to affect that?
Scammer:
Sir, well I can’t hear you…can you stop walking and talk to me first?
Josh B:
Okay, can you hear me now?
Scammer:
Yea, it be better
Josh B:
There’s artillery around here…it’s weird. I don’t understand why. I mean out of all places…around here right? Okay, is this because of the Mazda Miata, the convertible one…or because I didn’t pay it?
Scammer:
This is sir, because you filed taxes but your taxes have not been filed in correct for those years. There was some problem regarding a W-2 and W-4 form. So now regarding a W-2 and W-4 form unpaid, the IRS has issued an arrest warrant on your name. And now for this unpaid taxes, once you get arrested, your each and every property will be seized like your house, your State ID your Visa, your driver’s license. Each and every property that belong to your name will be seized by the IRS…once you get arrested.
Josh B:
If I own Marvin Gardens and Broadway, does the same thing happen or no?
Scammer:
Pardon?
Josh B:
If, let’s say I own the Broadway, Marvin Gardens or even the electric company does that have anything to do with this or no?
Scammer:
It’s regarding your Federal taxes sir.
Josh B:
Okay alright, then what else?
Scammer:
Do you have the money with you?
Josh B:
Yes, I have the money but I am not sure what to do with it now.
Scammer:
You want this matter be confidential or want this matter to be disclosed regarding your case?
Josh B:
I mean I probably want it confidential
Scammer:
Okay how much time to reach you back sir?
Josh B:
If I ask my boss…I have a shift duty that ends…uh, after the hippopotamus cage gets cleaned, I can probably go after the feeding, just before the raptors…and if I go before the raptors then I can probably go in about an hour…Is that good?
Scammer:
No sir because once I hang up this call you are sure to be arrested. You will be arrested from your work place sir. So what do you have to do is take a leave right now sir.
Josh B:
I know but I have a boss that is not going to let me out of my office just yet. They haven’t even fed the animals…the animals haven’t even been fed yet. Like I don’t know what I’m supposed to do…I can’t just leave now but I can talk to my boss and ask him if he can let me go…if I come back and at least get him some sort of a sausage sandwich and maybe a Slurpee he’ll be open for it, you know?
Scammer:
Pardon?
Josh B:
I said if I can at least offer my boss…you know tell him what I’m doing, hopefully he’ll totally understand what I’m trying to do here ‘cause I can’t get in trouble again. Not with that mess of stuff I did before.
Scammer:
Now if you can speak to your boss that you are getting an arrest warrant, don’t you think your job will be as risk?
Josh B:
Yea, that’s why I have to go and talk to him about it.
Scammer:
So that’s why you have to go to him, say you’re having an emergency so you have to leave for the house…you have to leave for an hour.
Josh B:
Okay, this sounds like a good plan…I’m going to walk into his office but I hope it’s okay. He actually just fired somebody. I gotta be careful. The last person he fired…I don’t even know why…but I am going to talk to him to see if I can convince him…Okay wish me luck…I’m going to be back in just a minute (Josh B then hangs up).
Security Alert for Tax Preparers - Protect Your Clients, Protect Yourself
Email phishing scams have become much more prevalent as of late. Hackers pretending to be the IRS target unsuspecting taxpayers in an effort to coerce individuals into providing sensitive personal information, including their passwords In the latest iteration, scammers are targeting tax preparers. How Does it Work?
Rather than pretending to be the IRS, hackers disguise themselves as the preparer’s tax software provider. Tax professionals receive an email containing a link which is represented as a download containing an update to the tax preparer’s current tax software package. The naming convention uses the name of the recipient’s software package with the extension “.exe”.
Instead of a software update, the program once downloaded, tracks the keystrokes made by the user, revealing passwords, login information, and other sensitive data.
Protect Your Clients, Protect Yourself
As a result of the increasing rate of scams affecting tax professionals and other scams targeting individual taxpayers, professionals are urged to increase their security measures to protect both their own and client’s sensitive information.
Increasing Security Measures
Some actions steps include:
- Password changes no less frequently than quarterly
- Encrypt emails that contain sensitive taxpayer information prior to sending
- Provide training for team members making them aware of any policy changes in your security procedures to ensure compliance
- Immediately prohibit access to secure information for employees no longer with your firm
- Be careful when allowing remote access to the firm’s internal network
- Pay special attention to your Preparer Tax Identification Number (PTIN)
- Monitor your PTIN by periodically logging on to the IRS website to ensure that the number of tax returns that you have filed mirrors the record maintained by the IRS.
The IRS provides a comprehensive guide including additional tips and information about protecting taxpayer information. See Publication 4557, Safeguarding Taxpayer Data, for more details.
IRS Warns about Fake Tax Notice Scam
The Internal Revenue Service is alerting tax professionals and taxpayers alike about a new scam involving fake CP2000 notices that are being sent to unsuspecting taxpayers, billing them for unpaid taxes related to the Affordable Care Act.
The IRS is issuing the alert in conjunction with its partners in the Security Summit initiative, in which the IRS has been teaming up with state tax authorities, tax software companies, major tax preparer chains and tax professional associations. The IRS has been partnering with the outside groups in an effort to battle the wave of identity theft, tax fraud and tax scams victimizing innocent taxpayers.
The IRS said it has received numerous reports across the U.S. of scammers who are sending fraudulent CP2000 notices for tax year 2015. The scam typically involves an email that includes the fake CP2000 attached to it. The IRS has reported the problem to the Treasury Inspector General for Tax Administration to investigate it.
The CP2000 can be a legitimate notice that the IRS mails to taxpayers through the U.S. Postal Service, but the IRS noted the notice is never sent as part of an email to taxpayers. Taxpayers and tax professionals should be suspicious of any notices that are sent electronically. The IRS does not initiate contact with taxpayers by email or through social media such as Twitter or Facebook.
The IRS’s Automated Underreporter Program generates a CP2000 notice when income reported from third-party sources such as employers does not match the income reported on a tax return. It includes instructions to taxpayers about what to do if they agree or disagree that additional tax is owed. The notice also requests that a check be made out to “United States Treasury” if the taxpayer agrees additional tax is owed. If taxpayers are unable to pay the additional tax, the notice provides instructions for payment options such as installment payments.
The fraudulent CP 2000 notices appear to be issued from an Austin, Texas address and request information regarding 2014 coverage under the Affordable Care Act. The payment voucher lists the letter number as 105C.
The bogus CP2000 notice includes a payment requesting taxpayers mail a check made out to “I.R.S.” to an “Austin Processing Center” at a P.O. box address. There is also a “payment” link within the email.
To determine if a CP2000 notice is real or not, see the IRS web page Understanding Your CP2000 Notice, which includes an image of a real notice. The IRS advised taxpayers or tax pros who receive this scam email should forward it to phishing@irs.govand then delete it from their email account. Taxpayers and tax professionals generally can do a keyword search on IRS.gov for any notice they receive. Taxpayers who receive a notice or letter can view explanations and images of common correspondence on IRS.gov at Understanding Your IRS Notice or Letter.