How to identify IRS scammers

COMMENTARY /// Financial safety


 

 

As a former IRS agent and CPA for over 45 years, I’ve experienced almost every tax situation you could imagine.

But there is a new twist tied to an old scam aimed at international taxpayers and nonresident aliens. In this scam, criminals use a fake IRS form W-8BEN to solicit detailed personal identification and bank account information from victims.

Here’s how the scam works. Criminals mail or fax a letter indicating that although individuals are exempt from withholding and reporting income tax, they need to authenticate their information by filling out a phony version of form W- 8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting.

Recipients are requested to fax the information back.

Form W-8BEN is a legitimate U.S. tax exemption document; however, it can only be submitted through a withholding agent.

In the past, fraudsters have targeted non-residents of the U.S. using the form as a lure to get personal details such as passport numbers and PIN codes. The legitimate form W- 8BEN does not ask for any of that information.

The phony letter or fax also refers to a Form W9095, which does not exist. Furthermore, the IRS doesn’t require a recertification of foreign status.

Also be alert to bogus letters, emails and letters that appear to come from the IRS or your tax professional requesting information.

Note that the IRS does not:

Demand that people use a specific payment method, such as a prepaid debit card, gift card or wire transfer. The IRS will not ask for debit or credit card numbers over the phone.

Demand immediate tax payment. Normal correspondence is a letter in the mail and taxpayers can appeal or question what they owe.

Threaten to bring in local police, immigration officers or other law enforcement to arrest people for not paying. The IRS also cannot revoke a license or immigration status.

Taxpayers who receive the IRS phone scam or any IRS impersonation scam should report it to the treasury inspector general for tax administration at the IRS Impersonation Scam Reporting site and to the IRS by emailing phishing@irs.gov with the subject line “IRS Impersonation Scam.”

Kash Chandani is a CPA and former IRS agent. He can be reached at (805) 494-4334 or by email at kash@less4irs.com.