Tax Season's 'Dirty Dozen'
Look out for scammers phishing for government rebate checks this tax season.
March 21, 2008— -- Tricking taxpayers into revealing sensitive information with the lure of the government rebate is the latest trend used by scammers this tax season, according to trademark and tax experts.
"With scam e-mails that relate to the rebate, there's a risk that consumers are going to react more," Alan Drewsen, executive director of the International Trademark Association (INTA), told ABCNews.com.
The scheme involving the economic stimulus package is so prevalent this season it nabbed the No. 2 spot on the IRS's list of 2008 "Dirty Dozen" Tax Scams.
Scammers e-mail or call a taxpayer and request some piece of personal information, such as a bank account number, claiming it will be used to deposit the stimulus payment directly into the taxpayer's account.
The IRS warns taxpayers on its site that "the only way to get a stimulus payment is to file a 2007 tax return."
The one scam to top the rebate check on the IRS's "Dirty Dozen" is phishing, the use of fraudulent e-mails to trick taxpayers into revealing sensitive personal information.
"To date, taxpayers have forwarded more than 33,000 of these scam e-mails, reflecting more than 1,500 different schemes, to the IRS," the agency says.
According to Drewsen, some of the more popular scam e-mails this year, all of which boast an IRS or other trusted logo, include:
-"Audit Alert," in which the taxpayer is told he or she is subject to an audit, causing "immediate panic" and encouraging a response to the phony e-mail;
-"Changes to Tax Law," a seemingly "helpful, fact-based e-mail" that would be of interest to taxpayers about to file online; and
-"Refund," which promises an already calculated refund if the taxpayer "just take certain steps" by clicking on a link to an outside, bogus site ready to request the taxpayer's personal information.
"Scam artists use some name or some logo that inspires consumer confidence" so that they can "take advantage of that confidence," Drewsen said.
Also making the IRS's "Dirty Dozen" list this year are claiming unreasonable or excessive fuel tax credits, which makes its debut on the list and could now carry a $5,000 penalty; abusing retirement plans, which usually entails evading the government's limit on contribution amounts; and preparer fraud, in which a hired tax preparer persuades a taxpayer to make fraudulent claims with the lure of large returns.
Scammers' tenacity coupled with an almost 15 percent increase to date over last year in online self-tax filing poses serious ramifications for taxpayers.
According to the Federal Trade Commission, more than 20,000 people who reported identity theft in 2007 said fraudulent tax returns were filed in their name.
But that number may be much greater. According to the commission's latest survey on identity theft, released this past November, some 8.3 million people had their identity stolen in 2005.
And last year, market analyst Gartner Inc. reported 3.5 million adults admitted to revealing sensitive personal or financial information to a phisher in 2006. Of those, 2.3 million lost money with each victim losing an average of $1,244.
So how should taxpayers be safe this season?
-"Beware of unsolicited e-mails and telephone calls," Drewsen advises. "The IRS does not send out unsolicited e-mails for rebates and audits."
-Don't fall for offers that "sound too good to be true" because they generally are.
-Look closely at an e-mail sender's address, Drewsen says. If the address is a long string of numbers, letters and symbols, the e-mail is most likely bogus.
-Use a search engine when looking for a Web site instead of typing an address directly into the Web browser's address bar.
"Consumer vigilance is what is important," INTA executive director Drewsen said. "A lot of scammers out there on the Internet use whatever's current to try to attract the consumer's attention."