A new identity theft scam uses fake IRS correspondence and a doctored IRS form to con personal and financial information out of non-resident aliens with U.S.-based income. The fraudulently obtained information is then used to steal the taxpayer's identity and financial assets.

Fake IRS form

Targets of this scam are sent a phony IRS Form W-8BEN ("Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding") which has been altered by the scammers to solicit detailed personal and financial information. The information sought typically includes:

Date of birth

Social Security number

Passport number

Bank name

Account number, type, and date opened

Email address

Profession

Daytime phone number

How often the recipient visits the U.S.

Information on the recipient's spouse, children, and parents

Fake IRS letter

The bogus IRS form is accompanied by correspondence, purportedly from the IRS, that is aimed at non-resident aliens who have U.S.-based income derived from investments in U.S. property, such as securities or bonds. The fake correspondence claims that the recipient will be taxed at the maximum rate unless the form is filled out with the requested personal and financial data, then faxed to a specified fax number.

About 2.5 million non-resident aliens receive U.S.-based income, according to the IRS.

The scam, which has been reported in South America, Europe, and the Caribbean, exploits public anxiety about dealings with the IRS and unfamiliarity with the arcane details of U.S. tax laws and procedures. "This is an international variation of an old scheme where scam artists try to get valuable information by pretending to be from the IRS," said IRS Commissioner Mark W. Everson. "Taxpayers should be wary of strangers trying to obtain sensitive personal information, whether it's in person, over the phone, through the mail, or over the Internet."

Facts worth noting

IRS representatives call taxpayers' attention to the following pertinent facts:

The IRS does not allow forms to be faxed.

The IRS does not request personal

A genuine Form W-8BEN would sent by the recipient's financial institution, not by the IRS.

The rate at which a non-resident alien pays tax to the IRS depends on the terms of the tax treaty between the U.S. and that individual's country.

Note that while there is a legitimate IRS Form W-8BEN, it does not ask for any of the personal information listed above — except, in certain cases, a Social Security number or IRS-generated Taxpayer Identification Number. The non-resident alien's financial institution (whether a bank, a brokerage firm, an insurance company, or some other organization) acts as the non-resident alien's withholding agent for any income from a U.S. source that is subject to U.S. income tax. The W-8BEN is used by the financial institution to determine whether or not the customer is exempt — and, if not, the appropriate amount to withhold.

Reporting this scam

The Treasury Inspector General for Tax Administration (TIGTA) investigates identity theft related to tax administration. Non-resident aliens who have received a fraudulent letter and form should report this to TIGTA in one of the following ways:

Call the toll-free fraud referral hotline at 1-800-366-4484;

Fax a complaint to 202-927-7018; or

Write to the TIGTA Hotline, P.O. Box 589, Ben Franklin Station, Washington, D.C. 20044-0589.

Recipients of this scam should not under any circumstances provide personal or financial information or follow any other instruction given in the fraudulent letter and form.

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http://www.identitytheft911.com/education/alerts/alert20040727irs.htm

Identity Theft 911 provides one-on-one counseling, strategies, and resources to targets of identity theft. Combining an intense one-to-one focus with a comprehensive nationwide resource network, the company specializes in helping individual and enterprise clients resolve the financial, legal, and emotional fallout from identity theft and related crimes.

iborissova@identitytheft911.com