Tax Scam Warning: Beware of Phony Refund Scheme Abusing Popular College Tax Credit; Senior Citizens, Working Families and Church Members Are Targets
IR-2012-29, March 2, 2012
WASHINGTON –– The Internal Revenue Service today warned senior citizens and other taxpayers to beware of an emerging scheme tempting them to file tax returns claiming fraudulent refunds.
The scheme carries a common theme of promising refunds to people who have little or no income and normally don't have a tax filing requirement. Under the scheme, promoters claim they can obtain for their victims, often senior citizens, a tax refund or nonexistent stimulus payment based on the American Opportunity Tax Credit, even if the victim was not enrolled in or paying for college.
In recent weeks, the IRS has identified and stopped an upsurge of these bogus refund claims coming in from across the United States. The IRS is actively investigating the sources of the scheme, and its promoters may be subject to criminal prosecution.
"This is a disgraceful effort by scam artists to take advantage of people by giving them false hopes of a nonexistent refund," said IRS Commissioner Doug Shulman. "We want to warn innocent taxpayers about this new scheme before more people get trapped."
Typically, con artists falsely claim that refunds are available even if the victim went to school decades ago. In many cases, scammers are targeting seniors, people with very low incomes and members of church congregations with bogus promises of free money.
The IRS has also seen a variation of this scheme that incorrectly claims the college credit is available to compensate people for paying taxes on groceries.
The IRS has already detected and stopped thousands of these fraudulent claims. Nevertheless, the scheme can still be quite costly for victims. Promoters may charge exorbitant upfront fees to file these claims and are often long gone when victims discover they've been scammed.
The IRS is reminding people to be careful because all taxpayers, including those who use paid tax preparers, are legally responsible for the accuracy of their returns, and must repay any refunds received in error.
To get the facts on tax benefits related to education, go to the Tax Benefits for Education Information Center on IRS.gov.
To avoid becoming ensnared in this scheme, the IRS says taxpayers should beware of any of the following:
- Fictitious claims for refunds or rebates based on false statements of entitlement to tax credits.
- Unfamiliar for-profit tax services selling refund and credit schemes to the membership of local churches.
- Internet solicitations that direct individuals to toll-free numbers and then solicit social security numbers.
- Homemade flyers and brochures implying credits or refunds are available without proof of eligibility.
- Offers of free money with no documentation required.
- Promises of refunds for "Low Income – No Documents Tax Returns."
- Claims for the expired Economic Recovery Credit Program or for economic stimulus payments.
- Unsolicited offers to prepare a return and split the refund.
- Unfamiliar return preparation firms soliciting business from cities outside of the normal business or commuting area.
This refund scheme features many of the warning signs IRS cautions taxpayers to watch for when choosing a tax preparer. For advice on choosing a competent tax professional, see Tips for Choosing a Tax Return Preparer on IRS.gov.
Information Security Awareness and Corporate Account Takeovers
Several Banking and law enforcement to form a Task Force called "The Texas Bankers Electronic Crimes Task Force". Below is an informational document on Corporate Account Takeover and Information Security Awareness that can be found by clicking here.
Please take a few minutes to review the presentation and associated information. We want to make you aware of the types of crime that are emerging. Please train your employees that have access to online bill pay and account transfers to make security a priority. If you suspect that your account might have been compromised, please let us know immediately. It is your responsibility to monitor your account and inform us of any problems. We want to insure that your experience with our online banking product continues to be safe and pleasant.
Warning signs visible to a business or consumer customer that their system/network may have been compromised include:
- Inability to log into online banking (thieves could be blocking customer access so the customer won't see the theft until the criminals have control of the money);
- Dramatic loss of computer speed;
- Changes in the way things appear on the screen;
- Computer locks up so the user is unable to perform any functions;
- Unexpected rebooting or restarting of the computer;
- Unexpected request for a one time password (or token) in the middle of an online session;
- Unusual pop-up messages, especially a message in the middle of a session that says the connection to the bank system is not working (system unavailable, down for maintenance, etc.);
- New or unexpected toolbars and/or icons; and
- Inability to shut down or restart the computer.
- BEWARE if you are requested to provide sensitive/confidential information including account numbers, passwords, Credit Card/Debit Card numbers including expiration date, and the three digit security code. Contact the requesting entity by phone prior to providing this type of information.
Please contact your local banking center if you have any questions, or if we can assist you in any way.
Ten Steps to Help Protect You from Identity Theft
- Be cautious with your mail. Promptly remove incoming mail from your mail box. Secure outgoing mail. Shred mail that has personal information, such as bank account or credit card information.
- Read your credit card statement to make sure there are no unauthorized charges. We can no longer just look at the balance and pay it, we have got to look at that itemized statement.
- Check your credit report three times a year to make sure no one has opened lines of credit under your name. To request a free credit report, call (877) 322-8228 or go to the AnnualCreditReport.com website.
- If asked for your Social Security number at the doctor's office or pharmacy, write it down on a piece of paper so someone else doesn't overhear you. Take back the paper and destroy it.
- Carry only documents that you need when traveling. If you have a passport, don't take your Social Security card. If you're using only one credit card, don't take the others with you.
- Photocopy all important records in your wallet so you remember to cancel all accounts if your wallet is lost.
- If you're going to a physician who already has your Insurance card, take a photocopy of the card with you and black out some of the numbers so you can present that at the front desk if asked.
- Reduce telemarketing calls by signing up for the federal do-not-call registry at (888) 382-1222 or the website for the Do Not Call Registry: donotcall.gov.
- Reduce junk mail by going to the DMAchoice.org website.
- Eliminate pre-approved credit card offers by calling (888) 567-8688 or visiting the website for opting out of pre-approved credit card mail: optoutprescreen.com.
FTC Advises Consumers on What to Do if Their Identity is Stolen
FTC Advises Consumers on What to Do if Their Identity is Stolen
Step-by-Step Guides and Videos Explain How to Respond, How to Protect Kids' Information
If your identity is stolen, what will you do? Do you know your rights? Knowing what to do is important because an identity thief can hijack your tax refund, alter your medical records, prevent you from getting credit or a job, and even borrow money in your child's name.
The Federal Trade Commission, the nation's consumer protection agency, offers updated information explaining how to protect your child's information and your own, and the immediate steps to take to limit the damage identity theft can cause.
All urls below access http://www.ftc.gov
Taking Charge: What To Do If Your Identity Is Stolen is a step-by-step guide that includes sample letters, forms and essential contact information. A brochure, Identity Theft: What To Know, What To Do, explains the basic steps of protecting information and responding to identity theft. Safeguarding Your Child's Future tells parents how to protect their children's information, find out if a credit report has been created for them, and respond to problems.
"This is critical information for consumers. For victims of identity theft, knowing how to take charge is key," said David Vladeck, Director of the FTC's Bureau of Consumer Protection. "It can help them minimize the damage, and spot potential signs of trouble early." Read more .
FTC Offers Warning, Advice on Tax-Related Identity Theft
Did you know that your Social Security number can help an identity thief get a job, or the tax refund that should be yours?
The Federal Trade Commission, the nation's consumer protection agency, cautions that thieves can use a stolen Social Security number to apply for a job or file for a tax refund under a false identity. The FTC advises that, if you think this has happened to you, or if you get an Internal Revenue Service notice indicating a problem, contact the IRS immediately for help with your tax return, any refund, and protecting your IRS account from identity theft in the future.
The FTC also recommends three steps to minimize the potential damage from identity theft:
- Put a fraud alert on your credit reports
- Review your credit reports
- Create an identity theft report by filing an identity theft complaint with the FTC and filing a police report.
Please visit the Federal Trade Commission website for more information: http://www.ftc.gov
February 23, 2011
NACHA Phishing Alert (2/22/11) Email Claiming to be from the "Electronic Payments Association"
NACHA -- The Electronic Payments Association has received reports that individuals and/or companies have received a fraudulent email that has the appearance of having been sent from NACHA and signed by a non-existent NACHA employee. Specifically, this email claims to be from the "Electronic Payments Association" and appears to be coming from the email address "firstname.lastname@example.org." See a sample of the email below.
Be aware that phishing emails frequently have attachments and/or links to Web pages that host malicious code and software. Do not open attachments or follow Web links in unsolicited emailsfrom unknown parties or from parties with whom you do not normally communicate, or that appear to be known but are suspicious or otherwise unusual.
NACHA itself does not process nor touch the ACH transactions that flow to and from organizations and financial institutions. NACHA does not send communications to individuals or organizations about individual ACH transactions that they originate or receive.
If malicious code is detected or suspected on a computer, consult with a computer security or anti-virus specialist to remove malicious code or re-install a clean image of the computer system.
Always use anti-virus software and ensure that the virus signatures are automatically updated.
Ensure that the computer operating systems and common software applications security patches are installed and current.
Be alert for different variations of fraudulent emails.
= = = = = Sample Email = = = = = =
From: email@example.com [mailto:firstname.lastname@example.org]
Sent: Tuesday, February 22, 2011 7:32 AM
To: Doe, John
Subject: ACH transaction rejected
The ACH transaction, recently sent from your checking account (by you or any other person), was cancelled by the Electronic Payments Association.
Please click here to view report
January 21, 2011
FDIC Issues Special Alert on Deposit-Insurance E-Mail Scam The FDIC has issued a special alert to warn consumers about an e-mail scam that uses the alleged suspension of consumers' deposit insurance coverage as a ploy to obtain personal information. The e-mail -- purportedly from the FDIC -- informs recipients that "in cooperation with the Department of Homeland Security, federal, state and local governments," the FDIC has withdrawn deposit insurance coverage from their account "due to account activity that violates the Patriot Act."
It then says the deposit insurance coverage will remain suspended until identity and account information can be verified using a system called "IDVerify." The FDIC is attempting to identify the e-mails' source and disrupt their transmission, officials said.
June 21, 2010
ALERT: We have learned that criminals have launched a major e-mail campaign to deploy the infamous ZeuS Trojan e-mail, which will send spam messages, some disguised as fraud alerts, from the Internal Revenue Service, Twitter account hijack warnings, or salacious Youtube.com videos. This fraudulent IRS e-mail uses the verbiage "Notice of Underreported Income" as the Subject Line and encourages the recipient to click a link to review their tax statement. All of the latest e-mails use a variety of URL shortening services.
This is a reminder that you should never open the attachment or download information from unexpected or spam emails.
June 18, 2010
Added Japan to list of Blocked Countries - January 18,2011
Important security alert for Debit Visa Card ® Customers!
First State Bank, Louise and Visa® work closely to monitor and protect your Debit Visa Card® from any fraudulent activity. When we learn of fraudulent activity taking place, we may block certain transactions that occur in a particular country or state or location or at a specific type of merchant. Currently, all Debit Visa Card® Signature-based transactions are being blocked in Italy, Japan, Great Britain and Canada at the present time.
If you are unable to use your Visa Debit Card as a credit card , you still may be able to use your Debit Visa Card® at all of these stores by simply selecting "Debit" and using your PIN.
As fraud patterns change, we may add or remove blocks as appropriate to protect you. Be sure to always monitor your account and let us know immediately if you notice unauthorized transactions. Please contact The First State Bank Customer Service at 979-648-2691, your local branch, or stop by your nearest Banking Center to report unauthorized transactions, or if you have further questions.
Identity Theft Protection
If you think you are a victim of identity theft please contact the Federal Trade Commission at http://www.ftc.gov/ or call them at 1-877-382-4357 and also contact your local branch for an account alert.
If you would like more information on identity theft, please visit the Federal Trade Commission's microsite on identity theft. http://www.ftc.gov/bcp/edu/microsites/idtheft/
- Nearly 15 million Americans are the victims of identity theft each year (Identity Theft Resource Center & Gartner Study 2006)
- Americans lost more than 1.2 billion dollars last year due to identity theft and fraud (FTC 2008)
- More than 285 million records were compromised in 2008 – This surpassed the total number of records breached in the previous four years combined.
- An identity theft victim spends an average of 330 hours trying to restore their identity if it has gone undetected for 24 months or more. (Identity Theft Resource Center)
For Identity Theft Protection: CSIdentity Protector