IRS Sends Out Warning After New Wave Of 'Phishing' Scams

by Leroy Baker, Tax-News.com, New York

11 July 2006

The Internal Revenue Service has warned taxpayers to be on the lookout for bogus e-mails claiming to be from the tax agency after receiving an increase in complaints.

Such 'phishing' scams are designed to trick the recipients into disclosing personal and financial information that could be used to steal the recipients’ identity and financial assets.

The IRS has seen a recent increase in these scams. Since November, 99 different scams have been identified, with 20 of those coming in June – the most since 40 were identified in March during the height of the filing season.

Many of these schemes originate outside the United States. To date, investigations by the Treasury Inspector General for Tax Administration have identified sites hosting more than two dozen IRS-related phishing scams. These scam Web sites have been located in many different countries, including Argentina, Aruba, Australia, Austria, Canada, Chile, China, England, Germany, Indonesia, Italy, Japan, Korea, Malaysia, Mexico, Poland, Singapore and Slovakia, as well as the United States.

The current scams claim to come from the IRS, tell recipients that they are due a federal tax refund, and direct them to a Web site that appears to be a genuine IRS site. The bogus sites contain forms or interactive Web pages similar to IRS forms or Web pages but which have been modified to request detailed personal and financial information from the e-mail recipients.

In addition, e-mail addresses ending with “.edu” — involving users in the education community — currently seem to be heavily targeted.

Once the fraudsters have obtained an individual's personal information, it is used to to steal their identity and financial assets. Typically, identity thieves use someone’s personal data to empty the victim’s financial accounts, run up charges on the victim’s existing credit cards, apply for new loans, credit cards, services or benefits in the victim’s name and even file fraudulent tax returns.

More than 7,000 bogus emails have been forwarded to the IRS, with nearly 1,300 forwarded in June alone.

IRS Commissioner Mark Everson stated that the agency never sends out unsolicited e-mails asking for personal information, and he warned taxpayers to "not be taken in by these criminals."

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