When news reports began to circulate of legislators working on a bill that would stimulate the nation's economy by sending out advance tax rebate checks, scammers immediately went to work on trying to use that information to their advantage.
According to the Internal Revenue Service web site, the IRS is already aware of several email and telephone scams that are going on now while people are anticipating income tax refund checks or advance tax rebates. The IRS is warning taxpayers to beware of any emails or telephone calls that use the IRS name.
While Americans are getting excited about the proposed tax rebate checks that they might receive, they may become increasingly susceptible to scammers who may attempt to use that excitement against them.
The economic stimulus package has not been passed, and the checks known as the tax rebate checks are not even on the way yet, but the IRS is already aware of some scammers using the proposed economic stimulus package to rob taxpayers.
Generally, thieves will attempt to manipulate people into exposing personal information such as Social Security numbers or financial information such as bank account or credit card numbers that they can then use to steal money from them or commit identity theft.
For all of the convenience that the Internet provides, it also is a dangerous place for finances when scammers obtain the information that they need to steal. A victim's personal and financial information can be readily used on the Internet to open new credit card and loan accounts, empty existing bank accounts and run up credit card balances to their limits and beyond.
The IRS advises that with the right information, these criminals can even apply for services of benefits in their victim's names, commit crimes or even file fraudulent tax returns. All of these crimes can be committed against the victim over the Internet, without the scammer ever leaving home - even if their home may be in another country.
These crimes can also be committed very quickly, with the thief making off with the victim's money and good credit rating in the blink of an eye and long before anyone realized that a theft has occurred.
After a person has become the victim of identity theft, the effects can be pretty devastating and the mess left behind can be nearly impossible to clean up. Once a victim's credit record is destroyed by an identity thief, it can take many months and even years to restore and could even lead to bankruptcy.
In the meantime, they will have to spend time and money trying to repair the damage and may be denied many opportunities. With poor credit it can be difficult to get a good job or obtain housing, impossible to get a personal or car loan and education opportunities may evaporate. In some cases, victims of identity theft have even been arrested for crimes that they did not commit.
The IRS has advised that there have been reports of scammers making telephone calls to taxpayers, purporting to be IRS agents. During these calls, the scammer informs the potential victims that they will become eligible for a larger rebate in exchange for filing their tax returns early. The caller attempts to obtain the victim's bank account number and tells them that they need this information for the direct deposit of the rebate check they are entitled to receive.
According to the IRS website, when a taxpayer opts for a direct deposit of a legitimate refund, they do so by completing the appropriate section on their tax return when it is filed. The IRS does not gather taxpayers banking information over the telephone.
There are also several variations of a scam email going around, of which the IRS has become aware. The email seems to have come from the IRS and informs the victim that they are eligible to receive a tax refund of a specific amount. There is a link in the email that the taxpayer is instructed to click in order to access the tax refund claim form. This bogus form collects personal information that the thief can then use to access the victims' bank or credit card account.
In one of the known tax refund scam emails, two paragraphs are included that seem to pertain to tax-exempt organizations which distribute funds to other organizations or individuals. This email shows the name and a fake signature of the Director of the IRS's Exempt Organizations business division.
The IRS is informing taxpayers that it does not send out unsolicited email to individuals or businesses about their tax account matters (note if you have tax debt: in most cases it CANNOT be discharged through bankruptcy).
The best and easiest way for taxpayers to find out if they are due a refund from the IRS is to use the official IRS web site, www.IRS.gov.
The IRS has also become aware of another e-mail scam that would grab almost any taxpayers attention, and in a lot of cases, cause them to take action. This email also seems to be from the IRS, and it informs the potential victims that their tax return has been selected for an audit.
This e-mail may actually address the victim by name, making it seem legitimate. This email scam also uses a link, which the potential victim is told to click and provide personal and financial information. After the scammer has obtained this information, it is used to commit identity theft.
There are also other techniques that identity thieves use to attempt to get the information that they need to commit crimes. The only way to protect sensitive information and not fall prey to scams is to not provide personal or financial information that is solicited by telephone or email, no matter who claims to be requesting it.
To contact the IRS, taxpayers should use the official IRS web site by typing the address directly into the web browser. The correct web site address is www.IRS.gov. To avoid being scammed by links that direct users to fake web pages, the address should always be typed directly into the web browser. The same is true for PayPal.com or any other web site that may handle any type of financial information.
Savvy and safe Internet users know that it is patently unsafe to follow links to a financial institution from an email. It is also worth stating that email is an insecure method of transferring information on the Internet. People should always be smart and play it safe by always being suspicious of any telephone calls or emails that request any type of personal or financial information.
Disclaimer: The information provided on this site is not legal advice, does not constitute a lawyer referral service, and no attorney-client or confidential relationship is or should be formed by use of the site. The attorney listings on the site are paid attorney advertisements. Your access of/to and use of this site is subject to additional Supplemental Terms.