Washington Common sense says the IRS doesn't e-mail taxpayers offering tax refunds in exchange for confidential personal information. And yet, every year people are fooled by those and other bogus tax schemes.
"If somebody comes to you and says what's your bank account number, it's probably not us," said IRS spokesman Anthony Burke. "We contact taxpayers by U.S. mail first and provide a toll-free number to call the agency."
Among the scams making the rounds this filing season is the latest twist on "phishing": e-mails purporting to be from "tax-refundsirs.gov" aimed at tricking taxpayers into revealing personal information that is later used to steal their identities or cause other financial damage.
Typically, such e-mails use the same logos and e-mail addresses as legitimate companies and organizations, fooling people into thinking they are genuine. Recipients are directed to a Web link that asks for information such as a Social Security number or credit card information.
The Internal Revenue Service does not ask for personal identification or financial information via e-mail.
"We might ask you in a notice or a letter to explain your answer on something, but it would be very unlikely for us to ask you your Social Security number because we already know it," Burke said.
Anyone uncertain whether a purported IRS communication is genuine should call the agency at (800) 829-1040. Don't open attachments to suspicious e-mails because they may contain malicious code capable of infecting computers.
Other scams that appear around tax time include:
¢ IRS tax "collectors": Don't let anyone into your home unless they have identification. IRS special agents, auditors and collections officers carry photo IDs and will normally try to contact you before they visit. If you think the person at your door is an impostor, lock the door and call police. Then call the Treasury inspector general's hot line at (800) 366-4484.
¢ Big refunds for "free": Con artists may ask to "borrow" your Social Security number or give you a phony W-2 to make it look as if you qualify for a big refund. They may promise to split the refund with you. Don't sign a tax return without looking it over to make sure it's correct (and honest).
¢ Pay taxes, win a prize: A caller claims you've won a prize and only have to pay the income tax due on it. It's true that taxpayers who win prizes may need to make estimated tax payments, but the payment goes to the IRS, not the caller. A legitimate prize-giver sends you a 1099 form showing the total prize value that should be reported on your tax return.
¢ Social Security refund: If you're offered refunds for Social Security taxes paid during your lifetime, don't be fooled - the law doesn't allow such a refund. The scam artist usually asks victims to pay a "paperwork" fee of $100, plus a percentage of the anticipated refund, to file a refund claim with the IRS.
¢ Earned income credit: Unscrupulous tax preparers "share" one client's qualifying children with another client in order to allow both clients to claim the earned income tax credit. In fact, stricter rules for claiming this credit went into effect for 2005 and taxpayers need to make sure they qualify.
¢ Military service tax refunds: A caller posing as an IRS employee informs a taxpayer that he or she is entitled to a $4,000 refund because of a relative's military service, and then requests a credit card number to cover a $42 fee for postage. To appear legitimate, the scammer may provide an actual IRS toll-free number as the callback number. IRS employees who telephone taxpayers do not ask for credit card numbers or request fees for payment of a refund.
¢ Improper home-based business: Promoters claim that taxpayers can deduct most or all of their personal expenses as business expenses by setting up a bogus home-based business. In fact, the IRS has strict guidelines for deducting home office and business expenses. Taxpayers who claim such expenses should be prepared to document them during an audit.