USA TODAY - 'Phishing' tops of IRS list of taxpayer scams

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WASHINGTON
By Jim Abrams, Associated Press

'Phishing,' Internet-based schemes of tricking people into revealing confidential financial information, topped the Internal Revenue Service's annual list of scams that taxpayers should be aware of.

The IRS on Thursday also warned people not to fall for predators posing as IRS representatives who tell them they must reveal personal information to obtain the economic stimulus payment. That payment goes out automatically to anyone who files a tax return.

IRS ADVICE: What You Can Do to Report Phishing, E-mail Scams and Bogus IRS Web Sites

Also on Thursday, acting IRS Commissioner Linda Stiff told Congress that the first stimulus payment checks would go out shortly after this filing season ends. She said that those with a direct deposit account will receive their checks electronically the first week of May. The first paper checks will be mailed by the second week of May.

Under the stimulus package enacted by Congress, individuals will receive $300 to $600 and couples $600 to $1,200. Parents will also receive $300 for each child under 17.

The tax agency said taxpayers this year had forwarded to the agency 33,000 'phishing' scam e-mails reflecting more than 1,500 different schemes. It said thieves, some claiming to be IRS officials, use information to empty victims' bank accounts, run up credit card charges or apply for loans in the victims' names.

"We take identity theft very seriously," Stiff told a Ways and Means subcommittee hearing.

National Taxpayer Advocate Nina Olson, also testifying at the hearing, applauded the IRS for taking proactive measures to assist victims, including the recent implementation of a tracking system for identify theft victim accounts. But Olson, who works independently within the IRS, said the agency still lacks a coordinated approach and has a "duty to restore integrity to accounts... not to exacerbate injuries."

Olson also reported that some seniors who filed tax returns this year to get their stimulus checks after not filing for years have discovered that someone else has been using their Social Security numbers on tax returns. "The IRS does not have adequate procedures to address situations where the identity theft victim does not have a filing requirement," she said.

"The IRS urges taxpayers to be extra-vigilant," it said in its release, to people claiming that they must provide information to receive their stimulus checks. It stressed that the agency does not contact taxpayers by phone or e-mail about those checks.

Rep. Ron Kind, D-Wis., asked Stiff about the agency's spending of $42 million, "an incredible waste of taxpayer dollars," to send letters to taxpayers, most of whom would file returns anyway, to remind them that they must file a return to get a stimulus check.

Stiff said it was a "prudent call" considering that, after Congress approved a similar rebate in 2001, the agency received 27 million calls, causing their systems to crash.

Among other scams, it reminded taxpayers that they are liable for $5,000 penalties for submitting frivolous claims such as a constitutional right to object to military spending.

Others on the list this year were fuel tax credit scams, the offshore hiding of income, the misuse of trusts and the abuse of charitable organizations. It warned people to watch out for tax return preparers who attract clients by promising large refunds and charge inflated fees for their services.

Website address: http://www.usatoday.com/tech/news/computersecurity/infotheft/2008-03-13-irs-phishing-scam_N.htm