IRS Warns of Scheme to Steal Identity and Financial Data
Tax Analysts Document #2002-10586
The Internal Revenue Service has warned of a fraudulent scheme that uses fictitious bank correspondence and IRS forms in an attempt to trick individuals into disclosing their personal and banking data.
The Service has warned (IR-2002-55) of a fraudulent scheme that uses fictitious bank correspondence and IRS forms in an attempt to trick individuals into disclosing their personal and banking data. The information is then used to steal the individual’s identity and bank account deposits.
In the scam, a letter claiming to be from the individual’s bank states that the "bank" is updating its records to exempt the individual from reporting interest or having tax withheld on interest paid on his or her bank accounts or other financial dealings.
Legally, banks must report interest to the IRS and individuals must include it as income. The "bank" correspondence encloses a phony form that purports to come from the IRS and seeks detailed personal and financial data. The letter urges the individual to fax the completed form to a specific number within seven days or lose the reporting and withholding exemption, resulting in withholding of 31 percent on the account’s interest. The scheme promoters then use the faxed information to impersonate the individual and gain access to the individual’s finances.
Individuals who have received a fraudulent letter and form should immediately contact their financial institution. They should also report the attempted fraud to the Treasury Inspector General for Tax Administration (TIGTA), by calling the toll-free fraud referral hotline at 1-800-366-4484, faxing a complaint to 202-927-7018, or writing to the TIGTA Hotline, P.O. Box 589, Ben Franklin Station, Washington, DC 20044-0589. TIGTA’s website is located at www.ustreas.gov/tigta.
According to the IRS, you receive a letter from your bank saying that in order for you to be able to continue deducting interest on your income tax form, some information needs to be updated. Included is an official looking form said to be from the IRS.Click here to see example letter.
The Treasure Department says that if you have received and responded to either of these schemes to contact your local police department and to also report it to The Treasury Inspector General for Tax Administration at 1-800-366-4484
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