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Saturday, December 7, 2019   

Phony Tax Forms Result in Identity Theft
by Cindy Hockenberry
Cindy Hockenberry is the Information Coordinator for the National Association of Tax Professionals. The National Association of Tax Professionals (NATP), founded in 1979, is a nonprofit professional association dedicated to excellence in taxation.  NATP was formed to serve professionals who work in all areas of tax practice. Click here to learn more about NATP, or click here to find a tax professional in your area.
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Cindy Hockenberry

A rash of fake IRS forms, along with an official-looking letter from a bank have recently fooled many taxpayers into providing personal information under false pretenses. The IRS has received several reports of this latest scam surfacing nationwide. Dozens of U.S. and foreign taxpayers have been identified so far.

In this scam, a letter claiming to be from the taxpayer’s bank states that the bank is updating its records in order to exempt the taxpayer from reporting interest income or having tax withheld on interest paid on his or her bank accounts or other financial accounts. The correspondence encloses a phony form that claims to come from the IRS and seeks detailed personal information and financial data. The letter urges the recipient to fax the completed form to a specific number within seven days or lose the reporting and exemption, resulting in a 31 percent withholding on the account’s interest. The scheme promoters then use the information to impersonate the taxpayer and gain access to the taxpayer’s finances.

One such phony form is labeled W-9095, Application Form for Certificate Status/Ownership for Withholding Tax. The form requests personal data used to prove identity, including passport number and mother’s maiden name. It also asks for sensitive financial data such as bank account numbers, passwords and personal identification numbers (PIN) that can easily be used to gain access to the accounts. The fictitious W-9095 attempts to copy the genuine IRS Form W-9, Request for Taxpayer Identification Number and Certification. The actual W-9 only requests the name, address, and Social Security number or Employer Identification Number of the taxpayer.

Other forms used in this scam are Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding. There is an actual IRS Form W-8BEN used by banks to ensure their non-U.S. customers meet the criteria to remain exempt from tax reporting requirements. However, the one used in this fraudulent scheme is altered to ask for unnecessary personal information. Another fictitious form used is labeled W-8888. The IRS wants to emphasize that it does not have either a Form W-9095 or W-8888.

The IRS is stepping up its efforts to keep taxpayers informed of the latest scams and as a result, has created an updated Criminal Investigation web page outlining schemes and cons. The information is found on the IRS web site at www.irs.gov, then using the home page link to Tax Scams/Fraud Alerts.

“Identifying and combating actively promoted tax schemes is our highest priority,” states Charles Rossotti, IRS Commissioner. “Nothing undermines confidence in the tax system more than the impression that the average taxpayer has to pay his or her taxes while unscrupulous taxpayers are allowed to get away with not paying,” Rossotti added.

More importantly, taxpayers are getting duped into providing confidential personal information under the ruse that they are not required to pay tax on otherwise taxable income. When the request comes from the taxpayer’s bank, accompanied with official-looking IRS forms, it is even more difficult to detect. Taxpayers who receive suspicious correspondence should immediately contact their trusted tax professional or financial advisor for guidance.

If you have received suspicious letters requesting personal information, seek some professional advice before giving it out. You can locate a professional tax practitioner in your area by accessing the National Association of Tax Professionals’ (NATP) member listing on the World Wide Web at www.taxprofessionals.com, or by calling NATP at 1-800-558-3402, ext. 3.



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