Tax Problem Alerts and Scams

Problem Alerts EFTPS Scam Aug. 20, 2010 The IRS recently became aware of a fraudulent scheme targeting Electronic Federal Tax Payment System users. The scheme uses an e-mail that claims that your tax payment was rejected and directs you to a website for additional information. The website contains malware that will attempt to infect your computer. The IRS does not initiate taxpayer communications through e-mail. If you receive a message claiming to be from the IRS or EFTPS, please: Do not reply to the sender, access links on the site or submit any information to them. Report and identify this or other phishing, e-mail scams and bogus IRS websites by forwarding the e-mail or URL information to the IRS at EFTPS is a tax payment system provided free by the U.S. Department of Treasury that allows you to pay federal taxes electronically via the Internet or phone 24/7. Visit EFTPS to enroll. Form 1099-OID Fraud Oct. 10, 2008 The IRS cautions taxpayers to avoid getting caught up in a new tax fraud disguised as a debt payment option for credit cards or mortgage debt. The fraud is also marketed as a way to reduce taxes or pay outstanding tax liabilities. It involves the filing of Form 1099-OID, Original Issue Discount, and/or bogus financial instruments such as bonded promissory notes or sight drafts. This fraud has evolved from an earlier frivolous argument that a “strawman” bank account has been created at the Treasury Department for each U.S. citizen, and that individuals could use such “strawman” accounts to pay debts and claim withholding credits. The IRS addresses the “strawman” argument in Revenue Ruling 2005–21 and Revenue Ruling 2004-31, and discredits the use of this position for income tax purposes. Moreover, the courts that have reviewed the “strawman” argument and other similar arguments have found them frivolous. For more information on frivolous schemes, see The Truth About Frivolous Arguments. The IRS Warns of Scam e-Mails or Phone Calls May 16, 2008 The IRS warns taxpayers to be on the alert for e-mails and phone calls they may receive which claim to come from the IRS or other federal agency and which mention their tax refund or economic stimulus payment. These are almost certainly a scam whose purpose is to obtain personal and financial information — such as name, Social Security number, bank account and credit card or even PIN numbers — from taxpayers which can be used by the scammers to commit identity theft. The e-mails and calls usually state that the IRS needs the information to process a refund or stimulus payment or deposit it into the taxpayer's bank account. The e-mails often contain links or attachments to what appears to be the IRS Web site or an IRS "refund application form." However genuine in appearance, these phonies are designed to elicit the information the scammers are looking for. The IRS does not send taxpayers e-mails about their tax accounts. Additionally, the only way to get a tax refund or stimulus payment, or to arrange for a direct deposit, is to file a tax return. For more information on consumer scams, see Suspicious e-Mails and Identity Theft.