IRS Issues Warning On Caribbean ‘Phishing’ Scam

by Mike Godfrey, Tax-News.com, Washington

05 August 2004

The Internal Revenue Service has renewed its warning about an identity theft scheme targeting non-resident aliens receiving US sourced income that has recently surfaced in the Caribbean.

The so-called ‘phishing’ scheme uses fictitious IRS correspondence and an altered IRS form in an attempt to trick US taxpayers overseas into disclosing their personal and financial data. The information fraudulently obtained is then used to steal the taxpayer’s identity and financial assets.

Caribbean countries in which this scheme has surfaced include Barbados, Puerto Rico, Tobago, Trinidad and the Turks & Caicos Islands. Earlier this year, the scheme appeared in South America and Europe.

In this particular scam, an altered IRS Form W-8BEN, 'Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding,' is sent with correspondence purportedly from the IRS to non-resident aliens who have invested in US property, such as securities or bonds.

The correspondence claims that the recipient will be taxed at the maximum rate unless the requested personal and financial data is entered onto the form and the form is faxed to the phone number contained in the correspondence.

Commissioner Everson commented:

"’Phishing’ in Caribbean waters for valuable information from potential victims is an old scam in a new place.”

"Taxpayers should be wary of strangers trying to obtain sensitive personal information, whether it's in person, over the phone, through the mail or over the Internet," he cautioned.

Based on the number of Forms 1042-S that were issued last year, there are about 2.5 million non-resident aliens who receive US-sourced income according to the IRS.

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