IRS warns yet again on scam artist trickery

IRS says 4,000 victims have lost $20 million since 2013

The IRS this week said some 4,000 victims have lost over $20 million to scammers and the rip-offs continue at a startling pace.

+More on Network World: FBI and IRS warn of pervasive, maddening business, consumer scams+

 

The IRS noted what it called a number of new variations on old schemes:

  • Scammers alter what appears on your telephone caller ID to make it seem like they are with the IRS or another agency such as the Department of Motor Vehicles. They use fake names, titles and badge numbers. They use online resources to get your name, address and other details about your life to make the call sound official. They even go as far as copying official IRS letterhead for use in email or regular mail.
  • Brazen scammers will even provide their victims with directions to the nearest bank or business where the victim can obtain a means of payment such as a debit card. And in another new variation of these scams, con artists may then provide an actual IRS address where the victim can mail a receipt for the payment – all in an attempt to make the scheme look official.
  • Scammers try to scare people into reacting immediately without taking a moment to think through what is actually happening.
  • Scam artists often angrily threaten police arrest, deportation, license revocation or other similarly unpleasant things. They may also leave “urgent” callback requests, sometimes through “robo-calls,” via phone or email. The emails will often contain a fake IRS document with a telephone number or email address for your reply.

The IRS said it is important to remember the official IRS website is IRS.gov. Taxpayers are urged not to be confused or misled by sites claiming to be the IRS but ending in .com, .net, .org or other designations instead of .gov. Taxpayers should never provide personal information, financial or otherwise, to suspicious websites or strangers calling out of the blue.

“We continue to see these aggressive tax scams across the country,” IRS Commissioner John Koskinen said. “Scam artists specialize in being deceptive and fooling people. The IRS urges taxpayers to be extra cautious and think twice before answering suspicious phone calls, emails or letters.”

It may seem obvious to most people , but the IRS said it will never:The IRS will never:

  • Angrily demand immediate payment over the phone, nor will the agency call about taxes owed without first having mailed you a bill.
  • Threaten to bring in local police or other law-enforcement groups to have you arrested for not paying.
  • Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
  • Require you to use a specific payment method for your taxes, such as a prepaid debit card.
  • Ask for credit or debit card numbers over the phone.

In June the IRS teamed with state tax administrators and leading tax preparation and software firms said they would step up enforcement efforts and bolster tax system security.

+More on Network World: Yikes: 10,000 IRS impersonation scam calls are placed every week+

In a nutshell, in the face of billions in stolen money, the industry and government groups agreed to work together to identify new steps to validate taxpayer and tax return information at the time of filing. There will be standardized sharing of suspected identity fraud information and analytics from the tax industry to identify fraud schemes and locate indicators of fraud patterns. And there will be collaboration in the future.

The collaborative agreement stems from a Security Summit held by the IRS – which just last month said its tax transcript request website was hacked to the tune of $39 million in lost tax refunds -- with the chief executive officers and private sector firms such as H&R Block, Liberty Tax and others, as well as federal and state tax administrators to discuss emerging threats on identity theft and expand existing collaborative efforts to stop fraud.

The IRS said three specialized working groups were established as part of the Summit, which was held in March, with members from the IRS, states and industry co-chairing and serving on each team. The teams focused on developing ways to validate the authenticity of taxpayers and information included on tax return submissions, information sharing to improve detection and expand prevention of refund fraud, and threat assessment and strategy development to prevent risks and threats, the IRS stated.

The group agreed to several important new initiatives:

Taxpayer authentication. The industry and government groups identified numerous new data elements that can be shared at the time of filing to help authenticate a taxpayer and detect identity theft refund fraud. The data will be submitted to the IRS and states with the tax return transmission for the 2016 filing season. Some of these issues include, but are not limited to: Reviewing the transmission of the tax return, including the improper and or repetitive use of Internet Protocol numbers, the Internet ‘address’ from which the return is originating. Reviewing computer device identification data tied to the return’s origin. Reviewing the time it takes to complete a tax return, so computer mechanized fraud can be detected. Capturing metadata in the computer transaction that will allow review for identity theft related fraud.

Fraud identification. The groups agreed to expand sharing of fraud leads. For the first time, the entire tax industry and other parts of the tax industry will share aggregated analytical information about their filings with the IRS to help identify fraud. This post-return filing process has produced valuable fraud information because trends are easier to identify with aggregated data. Currently, the IRS obtains this analytical information from some groups. The expanded effort will ensure a level playing field so everyone approaches fraud from the same perspective, making it more difficult for the perpetration of fraud schemes.

Information assessment. In addition to continuing cooperative efforts, the groups will look at establishing a formalized Refund Fraud Information Sharing and Assessment Center (ISAC) to more aggressively and efficiently share information between the public and private sector to help stop the proliferation of fraud schemes and reduce the risk to taxpayers. This would help in many ways, including providing better data to law enforcement to improve the investigations and prosecution of identity thieves.

Cybersecurity framework. Participants with the tax industry agreed to align with the IRS and states under the National Institute of Standards and Technology (NIST) cybersecurity framework to promote the protection of information technology (IT) infrastructure. The IRS and states currently operate under this standard, as do many in the tax industry.

Taxpayer awareness and communication. The IRS, industry and states agreed that more can be done to inform taxpayers and raise awareness about the protection of sensitive personal, tax and financial data to help prevent refund fraud and identity theft. These efforts have already started, and will increase through the year and expand in conjunction with the 2016 filing season.

+More on Network World: FBI and IRS warn of pervasive, maddening business, consumer scams+

The group said major system and process changes will be made this summer and fall by the participants in order to be ready for the 2016 filing season.

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