Web Tax Scam Steals Taxpayers' Returns

IRS warns consumers about new Internet tax scam.

ByABC News via logo
January 8, 2009, 12:18 AM

April 16, 2007 — -- As Americans scramble to file their taxes before tomorrow's April 17 deadline, they may be putting themselves at risk for one of the newest and most costly tax scams.

Con artists are bilking consumers out of hundreds, even thousands of dollars in tax refunds by targeting the 136 million people who file over the Internet. They lure victims by setting up bogus sites designed to steal personal information and money.

"We're very concerned about this because there is a Web site out there that looks like it's affiliated with the IRS, but it really isn't," said IRS spokesperson Terry Lemons.

Here's how it works: Internet crooks send e-mails, luring taxpayers to Web pages that look like IRS-approved sites where consumers can file taxes. Some even use IRS in their name.

After people submit their returns, the scam artist makes one crucial change -- replacing the taxpayers' bank account numbers with their own. They then submit the return and scoop up the taxpayers' refunds.

"It's very easy to set up a scam site. It's the sort of thing that, you know, a teenager could do with a little bit of Web experience," said Internet analyst Omar Wasow.

Evangelos Soukas knows how easy it is to pull off tax scams because he used to run them himself. The convicted identity thief was recently allowed a day out of prison to tell Congress how he wracked up more than $1 million in fraud. Soukas liked cheating taxpayers because the IRS requires very little information.

"It's actually easy. If I wanted to continue in this field, I could have safeguarded my true identity and never been caught," he said. "It's easier from the IRS than a bank, or calling a department store call center for a credit card."

Electronic filers should follow these guidelines: