Internet Scammers Imitate IRS

I’ve mentioned issues with the IRS’s computer system being potentially vulnerable to hackers - IRS Criticized and Hackable IRS. But a perhaps more insidious problem for taxpayers and computer users lies in sites and email scams that are designed to fool the average citizen into thinking that he or she is dealing with the actual Internal Revenue Service.

The scams and tricks these internet pirates use are pretty familiar to anyone who’s been paying attention to such issues. One reported on phillyburbs.com describes a site designed to look like the IRS’s. It doesn’t take too much skill to steal logo designs and general web layouts today. Victims are often lured to these types of sites through an email, usually one that offers money. The IRS is a particularly good entity to base this scam on because most US citizens have received some sort of refund from them at some time in the past and would like to do so again. Once the victim lands on the fake webpage they are asked for such things as social security numbers, bank accounts, and credit card numbers – all things that the scammers can use to steal money from the victim.

Another scam, described on MSNBC’s website, tells the victim that the IRS is willing to pay them for their opinion. It doesn’t take a particularly suspicious mind to see through that one.

There are a few rules of thumb that you can exercise to protect yourself from such scams that appear to be from the IRS or anyone.

First, always consider the source. On the internet the source is the URL. If the website you’re looking at doesn’t have irs.gov in the base URL, chances are it’s a scam.

Second, don’t trust the “from” email address. It’s pretty easy to fake that line in an email. If there are hyperlinks in the email – blue text that you can click on to go to a website – DO NOT click on it. Rather float your cursor over it and look in the lower left hand corner of your screen. There you will see the real URL source of the email.

Third, always be skeptical. Even if the email and website seem to check out, it’s better to be safe than sorry. Open a fresh browser and try to find the same information at the main IRS page - http://www.irs.gov/.

Fourth, seek professional help. I’m not suggesting that you have mental health issues. I don’t know you. I’m suggesting that you seek out an accountant or other financial professional that you trust and ask them if the claims you’re considering are legitimate.

Fifth, report everything. Hackers, scammer, phishers and other internet pirates will always be with us but the more that get reported, the fewer victims will be created.

IRS Criticized

“IRS Criticized.” Nothing new there, right? But this time the criticism came not from disgruntled taxpayers or harried acountants but from the Treasury Inspector General for Tax Administration (TIGTA). In two recent reports, the TIGTA chided the IRS in two distinct areas.

The first report questions the IRS’s projected savings. The IRS has estimated that it can save $160 million on taxpayer services in 2006 and 2007 but, the TIGTA says, these estimates can’t be demonstrably supported. This creates a fear that IRS cannot provide sufficient services as they cut resources in order to meet these savings goals.

The TIGTA second report criticizes the IRS for continuing to fail to provide adequate protection of taxpayer information. Though security measures have been improving, there are still areas of concern. Specifically the report referred to IRS employees’ changing their passwords for unauthorized callers.

No More Mister Nice-Guy

Remember the “Kinder, Gentler IRS” of the 90s? Well, you can forget about that! The complaints about IRS agents with the humanity of an enraged mountain gorilla may still be coming in but these days they fall on deaf ears.

With a $345 billion gap between taxes owed and taxes paid in 2001, the IRS has been beefing up their collection department. They increased spending for it by 13% in 2006 when compared to 2004. Another way to look at this is that of the IRS’s $11.6 billion dollar operating budget, 63% goes to collection and enforcement efforts.

And taxpayers are starting to notice. Accounting firms are reporting that word of mouth is driving delinquent payers to their offices for help because they heard from friends and colleagues about the IRS’s increasingly aggressive tactics.

C'mon, IRS, Don't Be So Shy!

A couple of Senators want the IRS to speak up a bit about one of it's benefits.

In a letter to Acting IRS Commissioner Kevin Brown Senators Max Baucus (D-MT) and Chuck Grassley (R-IA) asked that the Saver's Credit receive a bit more publicity.

The Saver's Credit is a dollar to dollar tax deduction - up to $2000 - available to American tax payers that make contributions to a retirement account.

The Senators acknowledge that many taxpayers have taken advantage of this savings incentive but millions more haven't, most likely because they simply don't know about it. The lawmakers would like the IRS to make this deduction better known to the American taxpayer through a variety of measures, including adding a specific line for it to the 1040EZ form.