Phishing and ID Theft Front Latest Tax Scams

Preparers and their customers snared in tax scams net: Internet Scambusters #485

Identity thieves have been tricking users of tax preparation software and customers of a well-known firm of professional preparers in this year’s batch of tax scams.

Using cunning phishing tricks, they harvest victims’ personal information to claim refunds. In other cases, they use the names of recently deceased people to file fraudulent returns.

We have the details in this week’s report, plus brief details of the latest IRS “dirty dozen” list of tax scams.


Phishing and ID Theft Front Latest Tax Scams


Two of the big names in tax preparation have found themselves the target of tax scams in the countdown to the April 17 deadline (extended from the normal deadline of April 15) for filing returns.

Customers of both Intuit, producer of the market-leading Turbo Tax electronic tax preparation software, and H&R Block, the best-known name in brick-and-mortar tax preparation offices (as well as software) have fallen foul of a couple of mean but effective con tricks.

In addition, the IRS is warning of a big rise in the number of tax frauds in which crooks file false claims and pick up the rebates of their victims.

Turbo Tax Scam

Emails are currently landing in unsuspecting taxpayers’ inboxes attempting to lure them into giving away crucial personal information.

The messages purport to come from Intuit. They’re sent out at random because the scammers know that some of the recipients are bound to be Turbo Tax users.

There are several tax scam emails. One has the Intuit logo and is headed “Tax Information Needed Within 30 Days.” It reads as follows:

(Begin tax scam email extract)

In our continuing effort to guarantee that correct information is being sustained on our systems, and to be able to grant you better quality of service; INTUIT INC. has participated in the Internal Revenue Service [IRS] Name and TIN Matching Program.

We have found out, that your name and/or Employer Identification Number, that we have on your account is different from the information provided by the SSA.

In order to review the information on your account, please enter the site.

(End tax scam email extract)

Users are then supposed to click a link that takes them to a fake Intuit page where they have to enter their personal details, including name and Social Security number.

As soon as they have this, the crooks file a phony return and collect a refund, usually $1,700 since the IRS does not require a W-2 for earnings up to this amount.

In other instances, tax scam emails ask recipients to verify they own the Turbo Tax program by providing the same confidential information, or they tell users they need to update their software by clicking on a link, which then downloads a virus.

Intuit’s advice (quoted directly from their website) is as follows:

* Do not click on the link in the email.

* Send a copy of the email to spoof@intuit.com.

* Do not forward the email to anyone else.

* Delete the email.

Tax Rebate Scam Targets H&R Block Clients

Waiting for your refund can be time-consuming and inconvenient, so tax preparer H&R Block offers an advance to customers via a prepaid debit card called the Emerald Card.

Scammers send out text messages — again at random; they have no way of knowing if you have an Emerald Card or not — saying there’s a problem with the card or it needs to be activated.

The message seems to come from H&R Block (though it really doesn’t) and asks victims to call a specific number.

There, they are greeted with a recorded message that asks them to key in their full name and card number.

Once the crooks have these details, they immediately drain the cash from the card by spending it online.

H&R Block has issued the following statement about this tax rebate scam:

“We believe the text was sent by someone with a random list of cell phone numbers, and we have no reason to believe H&R Block’s systems have been compromised. We’re advising recipients not to respond to the text, not to call the number provided, and not to offer any personal information whatsoever. H&R block does not send text or other messages asking clients to provide, update, or confirm sensitive data.”

IRS Tax Scams Warning

The IRS also reports that it’s seeing an increase in the number of fraudulent tax returns.

In particular, crooks have been filing tax returns in the names of recently deceased individuals or, in some case, those with mental disabilities — in other words people not in a position to know or be alert to bogus claims.

The scam is usually only discovered when a legitimate return is filed around this time of the year.

It’s not clear how the crooks get their hands on the victims’ Social Security numbers, although these are traded online by criminals.

The fact is, of course, that even if you’re alive and kicking, if a scam artist knows your name and SSN, they can file an early refund claim in January, which underlines the importance of protecting your Social Security number.

The IRS is alert to this trick. Last year they stopped two million phony returns, halting 1.6 billion dollars’ worth of refunds.

One consolation is that if you do find yourself a victim of this tax scam you probably still can get your refund, but you have to fill out a Federal Form 14039 and then wait several months for your money.

Other actions you can take include filing your return as early as possible (too late for that advice this year, but something to know for next time) and absolutely not clicking on links or giving away confidential information in response to emails.

The Dirty Dozen Income Tax Scams

Meanwhile, the IRS has recently published its annual list of the top 12 income tax scams, which it calls the dirty dozen.

As our report suggests, phishing for personal information and identity theft occupy the top two slots.

The IRS also reports what they’re calling the “free money” scam, which promises quick refunds with little or no paperwork.

Of course, the scammers charge a fee supposedly to tell you how to do this. By the time you discover it’s a dud, they’ve long since disappeared.

It’s worth checking the full list because there’s lots of guidance on how to avoid these scams.

You might also want to review some of our earlier reports on tax scams, Tax Scams: What You Really Need to Watch Out for.

Check out last year’s report, New Malware Threat Heads Up 2011 Tax Scams.

And, by the way, if you’re visiting the IRS website, make sure you key in the right address — that’s www.irs.gov.

There’s another site called irs.com that has nothing to do with the IRS.

We’re not saying the site is a scam but you might think you were on the official IRS site unless you spot the tiny disclaimer at the bottom of the page that tells you they are in no way associated with the US Treasury Department or the IRS.

Robocalls Footnote

Nothing to do with tax scams… but we just wanted to slip in a quick note this week to welcome the new restrictions on robocalls — automated marketing calls — announced recently by the Federal Communications Commission (FCC).

Among other things, the rules mean that marketers, even firms you currently do business with, will have to get your written permission before they can make an automated call to your number.

More details at Robocalls at FCC.gov.

See also our recent report on robocalls, Triple Threat of Robo Call Torture.

Of course, the new rules won’t stop the crooks and rogue marketers, in the same way that alerts won’t stop tax scams, but they’re important steps in the right direction.

That’s all for today — we’ll see you next week.