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tax scamsUncle Sam isn't the only one looking to collect from taxpayers this year: A rapidly growing number of Internet scammers are also using the guise of the IRS to siphon money out of consumers' pockets, security experts say.

"Approximately 155 million people are filing tax forms annually between now and April 15," says Robert Siciliano, an online security and safety evangelist for McAfee. And during the last five years, Siciliano says, tax-time identity thefts have dramatically surged.

Indeed, the number of complaints surrounding identity theft using a lure of tax refunds has soared 300% to 33,774 complaints in 2009, compared with 11,010 in 2005, according to a Scripps Howard News Service report.

Bogus Tax Refunds Are Popular Bait

A tax refund, albeit bogus, serves as juicy bait to potential victims in a phishing scheme, says Kevin Haley, director of Symantec's Norton Security, Technology and Response team.

"Everyone pays taxes, and there's something universal about wanting a refund," he says. "The Internet thieves know that people are more likely to fall for it if they think they'll get money."

The desire for a tax refund is apparently universal.

In India, a phishing scam circulated in 2010. Taxpayers received spam email messages, touting "Tax return" in the subject line. Users were then directed to click on a link that would take them to a fake version of the India Tax Department website, according to a Symantec blog.

W-2 Blues

Last year, identity thieves tried a new tax trick by emailing a bogus IRS notice to taxpayers, warning them that they did not submit an updated W-2 form. The email contained a link to a phishing website where taxpayers were instructed to enter their W-2 information, which includes such sensitive items as Social Security number, address, and wages.

Here's an example of the bogus W-2 email that made the rounds last year and was flagged by the Better Business Bureau:
From: update@irs.gov.us
Sent: 1/21/2011 4:37:41 P.M. Eastern Standard Time
Subj: Important: W-2 form update
We would like to inform you that as of the 21th of January you are late in updating your W-2 form submition with the new updated version. Please send us your completed W-2 update form by 02/01/2011. The updated version of the W-2 form please click on the link below:
(LINK REMOVED)

A New twist: Dialing for Dollars

With an ever-increasing number of people using smartphones, identity thieves are also targeting mobile devices. So Siciliano says he wouldn't be surprised if consumers begin to get bogus text messages purporting to come from the IRS.

"Most people feel the IRS knows everything about them, including their cellphone number," Siciliano says, adding that taxpayers are likely to click on a link in a text message because they may have a false sense of security that only a legitimate contact would have their cellphone number.

Advice for Playing it Safe

Here are some tips on avoiding tax scams, straight from the IRS:
  1. The IRS does not ask for personal identifying or financial information via unsolicited emails.
  2. Taxpayers do not have to complete a special form to obtain a refund.
  3. Do not open any attachments purporting to come from an IRS email. They could contain malicious code.
  4. Do not click on any website links in emails that claim to come from the IRS.
  5. Not sure if you are getting a tax refund? Contact the IRS at (800) 829-1040.

Security firms also offer up some advice about the typical types of social engineering bait used to lure the unwary: Offers to refund money to potential victims are popular among scammers, followed by offers of free tax advice or guarantees of untangling issues with back-taxes owed, Haley says.



Motley Fool contributor Dawn Kawamoto does not own any stock in the companies listed.

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pjohnson301

I scraped to get $3,800.00 for services of Roni Deutch. It had to be paid in 3 months. After my final payment, I heard nothing from them. I kept leaving messages and no return. Finally, went on their website and surprize!! They closed up, filed for bankruptcy, shredded all documents to hide paperwork. I reported to Ca.States Attny office. They said there's not much that can be done, and simply added my name to a class action suit. Lesson, just because they advertise on T.V., doesn't mean they are quality, reliable people with your best interests at heart. They royally screwed me and I could have paid half my tax bill w/ the money I spent on that heartless piece of s______

January 14 2012 at 12:38 AM Report abuse rate up rate down Reply
RJT99349

When should you ingore the IRS. "NEVER". Just you try it, you here.

January 13 2012 at 7:43 PM Report abuse rate up rate down Reply
Douglas

You can get forms from postoffice or on line or call irs to order them.

January 13 2012 at 7:14 PM Report abuse rate up rate down Reply
david

Anyone here talking about how there isn't a specific law requiring us to pay an income tax?

January 13 2012 at 7:12 PM Report abuse -1 rate up rate down Reply
1 reply to david's comment
THIS NEW FORMAT

Go ahead and try it. I hope you'll enjoy your time in prison. I'm told the Federal prison System is nicer than most States'. Be sure to let us know.

January 13 2012 at 7:21 PM Report abuse +1 rate up rate down Reply
lxixwithu

Yeah, that's the first thing that I do when someone I don't know calls me. I give them my Social Security number.

January 13 2012 at 6:48 PM Report abuse +1 rate up rate down Reply
figmoguy

Maybe if the recipients knew how to spell they would have picked up on the scam.

If you read the text; the word submission is spelled incorrectly.

" in updating your W-2 form ( submition ) with the new updated version" The correct spelling is SUBMISSION and NOT submition . Maybe they needed to stay in school longer.



submition

See full article from DailyFinance: http://srph.it/yDIyFW

January 13 2012 at 6:19 PM Report abuse rate up rate down Reply
1 reply to figmoguy's comment
peteycat915

Right you are. There is also this sentence: "The updated version of the W-2 form please click ...," which makes no sense. And the date "January 21th." So many of these scams are written by someone whose first language clearly is not English. It disturbs me that so many Americans evidently are unable to discern that fact.

January 13 2012 at 7:15 PM Report abuse rate up rate down Reply
bshum3

When in doubt call the IRS . They will tell you if it's legit or not and may go after the scammers . Also the IRS is not always right when they say you owe them more money . Stick to your guns if you know you are right . They will back down eventually .

January 13 2012 at 6:00 PM Report abuse +1 rate up rate down Reply
1 reply to bshum3's comment
dterraman

no need, they have recently recruited thousands more in their collection army, and many are equipped with new shiny assault shotguns...

January 13 2012 at 6:13 PM Report abuse -1 rate up rate down Reply
B

First off, I have never given the IRS my email address, so how could they suddenly be sending me ANYTHING?

January 13 2012 at 5:55 PM Report abuse +2 rate up rate down Reply
wolfebkk

How can I obtain IRS 1040 tax forms?

January 13 2012 at 5:33 PM Report abuse rate up rate down Reply
2 replies to wolfebkk's comment
lxixwithu

Post Office

January 13 2012 at 6:48 PM Report abuse +1 rate up rate down Reply
THIS NEW FORMAT

Call 1-800-829-1040

January 13 2012 at 7:23 PM Report abuse +1 rate up rate down Reply
matt

Always. **** the IRS, it's an independent organization that uses the people and the government.

January 13 2012 at 5:20 PM Report abuse -1 rate up rate down Reply