Archive for the ‘IRS’ Category

Income Tax Scams – WABI-TV

Russ and Joy talk about scammers that take advantage of the income tax season to gain personal information from you.

Tuesday’s deadline for filing income taxes has the scam artists in high gear. They’ll email, and sometimes call, saying they are Internal Revenue Service officials and that you owe taxes. They will demand payment, often by wire transfer, prepaid debit card, or by giving your credit card number, threatening jail-time, revoking your driver’s license and more if you don’t pay up.

Russ says not to fall for any of these ploys. The IRS will not email or call you, they will use regular mail as a primary means of communication. Russ also warns you to be wary of any phone calls, as these scammers may know such information as the last four numbers of your social security number, they may use fake phone numbers and badge numbers to appear more legitimate, and the may even go as far as calling back with threats posing as the police or the department of motor vehicles.

The Federal Trade Commission is warning businesses that emails with the subject line “Pending consumer complaint” are NOT from the FTC. They are from scammers claiming that someone has filed a complaint with the FTC about their company. Clicking on attachments could download a virus or other malware onto your computer, just delete them.

For more on malicious emails, visit http://www.onguardonline.gov/malware.

When the taxman cometh, make sure he’s really the taxman

CONSUMER FORUM

By Russ Van Arsdale, Executive Director, Northeast CONTACT

Posted Jan. 26, 2014, at 9:50 a.m. 

As the story went, the Internal Revenue Service was threatening people who had not filed their income tax returns by Jan. 31 with $10,000 fines.

The story was a hoax, of course. But similar threats are often treated as real, with terrified recipients of bogus emails and phone calls taking a panicky road to losing money.

Tax scams are high on the list of ploys that scammers use to try to steal identities. Dollar losses run into the billions every year. The IRS says scammers who call potential victims often:

— Know the last four digits of the victim’s Social Security number;

— Make caller ID appear that the IRS is really calling;

— Send fake emails to reinforce the scam;

— Use common names, phony IRS badge numbers and threaten victims with jail time or revocation of their drivers licenses;

— Call again, claiming to be police or the Department of Motor Vehicles — and caller ID again that appears to back them up.

Scammers who call with a little of your personal information can prompt you to give them enough data to steal your identity and file a false return. The IRS is watching for such fraud, but it’s still a major problem.

Federal officials advise, if you get such a phone call and you owe or think you might owe taxes, hang up and call the IRS at 800-829-1040. IRS staff can help answer your payment questions. If you don’t owe taxes and get such a call, report it to the Treasury Inspector General for Tax Administration at 800-366-4484.

You can also file a complaint with the Federal Trade Commission at FTC.gov. Include “IRS Telephone Scam” in your comments.

Businesses may be targets of scammers, too. Owners should watch for offers that are too good to be true (they are) or that require fees in advance. Reject any claim that “the IRS is giving away money” or that you can use outlandish write-offs. Also avoid “consultants” who want to create dummy corporations, hide money offshore or divert funds into trusts as tax dodges.

Scammers rifle through tax liens to see who’s in trouble, then offer “relief,” which means you pay them and get nothing. Some tax preparers can get you in trouble; they may make false claims to get a healthy return deposited to a bank account, then cut you a check for a fraction of the amount.

If someone else prepares your return, read it before signing; it’s still your responsibility to see that everything’s accurate. Don’t do business with a preparer who asks for a percentage of the refund you’re expecting. Do research on the preparer’s track record. Look for a Tax Preparer Identification Number (issued by the IRS) on your return. And never agree to have your return deposited in the preparer’s account.

Learn more about tax scams online at http://www.irs.gov/uac/Tax-Scams-Consumer-Alerts.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer 04412, visit http://necontact.wordpress.com or email contacexdir@live.com.

Department of Professional and Financial Regulation Offers Guidance for End of Year Charitable Contributions

Charitable Scams Can be More Prevalent This Time of Year  

GARDINER  –  As many Maine families consider holiday season and end of year charitable contributions, Governor Paul R. LePage and Commissioner Anne Head from the Department of Professional and Financial Regulation are encouraging Maine residents to check the legitimacy of unknown charities.  Potential donors are urged to always research charitable organizations before making a donation.  A quick check with the Department can provide information to help in determining whether a charity is legitimate or a scam.

“Maine people are well known for lending a hand to others and for supporting charities,” Governor LePage said.  “We saw that earlier this week with the successful conclusion of the Maine State Employees Combined Charitable, which has raised nearly $270,000 to help those in need.  We always encourage charitable giving and want to assist donors in directing their support to legitimate charities.”

Charitable organizations are required to be licensed with the Department’s Office of Professional and Occupational Regulation, which collects information about charitable activity in Maine and makes it available to the public.

“Charitable solicitation scams aren’t new, but they sometimes increase during the holiday season, at the end of the year, and in the aftermath of tragedies,” Commissioner Head said.  “It’s important for the public to know that guidance and resources are available to assist people in making sure their contributions are going to real charities.”

Commissioner Head advises individuals to ask questions and seek printed information about unknown charities; to confirm their legitimacy with regulators; to never send cash or wire money when requested to do so; to always keep receipts of donations; and to report concerns or complaints about questionable solicitations with the Department and law enforcement.

Information about charities can be obtained through the Department’s website (www.maine.gov/pfr), specifically atwww.maine.gov/pfr/professionallicensing/professions/charitable. Links allow for the search of licensed charitable organizations, as well as disciplinary actions.  Questions and complaints can also be made by calling the Charitable Solicitations Program at 207-624-8525.

Additional tips and advice accompany this news release and can also be obtained from the Federal Trade Commission (www.ftc.gov/charityfraud/).

The Department of Professional and Financial Regulation protects the citizens of Maine and supports the economy through the oversight of State-chartered financial institutions, the insurance industry, grantors of consumer credit, the securities industry, and numerous professions providing services to the public.  More information is available at www.maine.gov/pfr.

###

Tips and Advice When Considering Charitable Giving

December, 2013

  • Always research unknown charities before contributing.  And whether the charity is new or well established, you may wish to know what percentage of your contribution is spent on fundraising, employee compensation, or expenses which do not directly support the charity’s stated purpose.
  • Not all organizations with names that sound like charities are actually charities.  Some organizations select names that are similar to those of well-known charities.
  • Be cautious when contacted by telephone for a contribution.  Ask that the request be put in writing.  You may also want to ask if the caller is a paid solicitor or a volunteer for the charity.
  • Never give your bank account information or credit/debit card numbers to a caller.  And be wary if the person soliciting the contribution is willing to have someone rush to your home or business to meet with you and pick up a contribution.
  • If you wish to receive a tax deduction, make sure the organization has a tax deductible status with the Internal Revenue Service. “Tax exempt,” “non-profit,” and “tax deductible” mean different things.  Only “tax deductible” means contributions are deductible on your income tax return.  Visit the IRS website (www.irs.gov/charities) for more information.
  • Be wary of organizations which list only post office boxes or mail drop suite numbers as their address.  You may wish to inquire about the charity’s location.

 

Tax Return Fraud – WABI-TV, April 1, 2013

Russ and Joy discuss the possibility of your tax refund going to someone else. Watch Video

To prevent identity theft, guard your Social Security number

CONSUMER FORUM

By Russ Van Arsdale, Executive Director, Northeast CONTACT
Posted Feb. 17, 2013, at 3:12 p.m.

Almost everything you read about preventing identity theft advises that you guard your Social Security number, or SSN, like gold. Why, then, do some agencies insist that you carry certain documents containing your SSN everywhere you go? And as one local consumer asked us, why when you call some companies does everyone who answers the phone need to know your SSN?

We know that identity thieves try all sorts of tricks to access our SSNs. With the numbers and some other personal information, they can open accounts or apply for jobs posing as you. They can also try to get a refund from the Internal Revenue Service; alert the IRS immediately if you receive a letter saying:

• The IRS has information you’ve been paid by an employer that you don’t know.

• It has received more than one tax return with your name on it.

The IRS will work with you to straighten things out. Of course, it’s simpler if you can avoid the hassle in the first place by keeping your SSN out of the hands of thieves.

That can be a problem if you carry it everywhere. Thieves are not shy about picking your pocket or handbag and helping themselves to your SSN, as well as whatever cash you might be carrying. For that reason, experts in preventing identity theft advise you to leave your Social Security card and other documents that contain your number at home, unless it’s mandatory that you have it.

That’s where the San Diego-based Privacy Rights Clearinghouse, or PRC, has a problem with some companies and government agencies. PRC notes that in 2006, the U.S. Government Accounting Office found that 42 million Medicare cards, eight million Department of Defense ID cards and seven million Veterans Affairs ID cards carried SSNs. It took until the middle of 2011 for the numbers to begin disappearing from the military IDs.

The Social Security Number Protection Act became law in December 2010, but will take three years to fully implement. Many consumers are unhappy that their SSNs appear on their Medicare cards, which they may feel obligated to carry. The PRC suggests you photocopy your Medicare (or other) insurance card and either blacken or cut out the last four numbers of your SSN. Cut the photocopy to wallet size and carry that, instead of your card with the full number on it. Once you’re in a database, that should be sufficient for identification or authentication purposes.

The “last four numbers of your Social” has become a theme song for entities that still use SSNs as identifiers. We’re asked to believe that revealing a partial number is not risky. Consumers Union, publishers of Consumer Reports, disagreed in a September 2007 letter to the Federal Trade Commission, saying “use of even a partial SSN may be an ineffective authenticator given the widespread availability of these numbers.”

During this tax season, identity thieves are sending out bogus emails by the millions, trying to trick us. Don’t give personal or financial information to a caller or email purporting to be from the IRS — the agency does not do business in those ways. And don’t click on anything in any unsolicited email.

For more on the subject, visit the Federal Trade Commission website at www.ftc.gov and search “tax related identity theft.”

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer 04412, visit http://necontact.wordpress.com or email contacexdir@live.com.

A (Potentially) Taxing Situation | Consumer Information from FTC

February 12, 2013

by

Carol Kando-Pineda
Attorney, FTC

Tax season is here. It’s time to get your files and forms in order. You may be well-versed in W-2s and 1099’s, but do you know that an identity thief can mess up your tax files or even get to your tax refund before you can file for it?

Tax-related ID theft can happen in a few ways; all of them involve your Social Security Number (SSN). If someone uses your SSN to get a job, the employer reports that person’s income to the IRS using your SSN. When you file your tax return, you don’t include those earnings. The IRS doesn’t know those wages were reported by an employer you don’t know, so the agency would send you a notice or letter saying you didn’t report that income.

Sometimes an identity thief uses your SSN to file for — and get — your tax refund before you file. Then, when you file your return, IRS records show the first filing and the refund. You’ll get a notice or letter from the IRS saying more than one return was filed for you.

If this happens to you — or if the IRS sends you any notice or letter indicating a problem — contact them immediately. Visit the IRS  online or call 1-800-908-4490. Specialists will help you get your tax return filed, get you any refund you may be due, and protect your IRS account from identity thieves in the future.

One additional point: the IRS never starts contact with a taxpayer using email, text, or social media that asks for personal or financial information. If you get an email that claims to be from the IRS, do yourself a favor: don’t reply or click on any links.  Instead, forward it to phishing@irs.gov.

On February 20 and 21, 2013, the FTC, federal and state enforcement agencies, and consumer advocacy groups will hold a series of Town Halls in South Florida to discuss how to combat tax-related ID theft.

If you suspect identity theft, learn more about how to repair the damage.

As tax time approaches, be wary of tax scams

CONSUMER FORUM

By Russ Van Arsdale, Executive Director, Northeast CONTACT
Posted Feb. 10, 2013, at 6:20 p.m.

With February upon us, many Mainers are thinking about income taxes and wondering, can the filing deadline really be just a couple of months away?

It is, and the income tax fraud perpetrators are hard at work. Don’t let them catch you in one of their scams, like the fake email claiming it has information that you must deal with right now. They might say they have ways you can get extra deductions; they might even claim to have a refund check for you.

Or, instead of the carrot, they may wield a stick. The scary subject line might read, “FY 2010 and 2011 tax documents; accountant’s letter.” Uh-oh, an audit must be just around the corner … or it’s the scammers, acting tough and hoping we’ll open that attachment and turn loose the Trojan that will give them access to our computers and everything in them.

There are so many scams out there that the Internal Revenue Service has a website ( http://www.irs.gov/uac/Report-Phishing) devoted to keeping scammers at bay. Before reviewing some pointers, let’s look at some of the IRS’s top 10 scams from last year.

Identity theft tops the list. If the IRS notifies you that you’ve filed two tax returns or that you appear to have received wages from an unknown employer, you may have had your identity stolen. Thieves may have filed a tax return in your name and claimed a refund.

Last winter the IRS went after more than 100 people in 23 states suspected of being identity thieves. In 2011, the agency reported more than 900,000 fraudulent returns relating to identity theft. The IRS has been training thousands of employees to help deter such crimes.

Also on the IRS top 10 list is the phishing scam. It’s really the same old ploy to get you to click on an attachment, which starts a program that wreaks havoc on your computer. Resist the urge. DON’T click on attachments in unsolicited emails. DON’T click on attachments in email from people you know if something looks suspicious. And DON’T click on attachments in email from companies you do business with; it may be a look-alike that crooks have created to fool you. Call the company, or do a manual download rather than clicking.

Watch out for fraudulent tax preparers. Some of them charge big fees with promises of a big refund. They may prompt you to “get all you can” by cutting corners or giving the IRS false information, all of which can land you in jail.

Some scammers claim they can help you move money offshore; if you don’t follow the law exactly, you could be looking at a tax evasion charge. Or, the scammer might give you an account number with instructions to wire your money to it; you may find out too late that it’s the scammer’s account and your money is gone.

Another red flag is a promise of “free money” from the IRS. The scammer will promise a few simple tricks making tax return preparation simpler and prompting larger refunds. The “tips” may be weak or just plain wrong, and the “free” money goes to the crook.

Remember, the IRS does not use email, text messaging or social media to get personal or financial information from filers. If you get a fax claiming to be from the IRS, contact the agency to make sure it’s real. To do that, or for a tax-related question, you can reach the IRS through this website: http://www.irs.gov/uac/How-to-Contact-the-IRS-1.

One bit of friendly advice: If you file electronically, keep a hard copy for your files. And for low- and moderate-income households, there’s free tax preparation help available through the United Way of Eastern Maine (http://www.unitedwayem.org/content/4057/eastern-maine-cash) and Volunteers of America (http://www.voanne.org/Services/TaxAssistance).

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer 04412, visit http://necontact.wordpress.com or email contacexdir@live.com.

Look out for phony charities

CONSUMER FORUM

By Russ Van Arsdale, Executive Director, Northeast CONTACT
Posted Dec. 30, 2012, at 8:11 p.m.

As the end of the year approaches, many of us are thinking about charitable donations. Let’s face facts: Many donations are tax deductible, and many of us need all the deductions we can get.

Of course, the real reason to give is to support a cause that really needs your help. So, make sure when you give, that your money is going where you intend it to go.

That means staying away from nonprofits that may exist more for the benefit of professional fundraisers or overpaid executives than for people that really need help. Unfortunately, there are far too many of these types of “charities” around.

Some are created in response to natural disasters. “Storm chasers,” as they have become known, create websites even before a major storm strikes. The sites contain key words, like “relief,” to attract web searches. They have varying records in their effectiveness in providing real help to those in need after a storm.

The IRS issued reminders earlier this month, after more than 1,000 “relief” websites popped up following Hurricane Sandy:

  1. Give to recognized charities, and beware of sound-alike names (visit the IRS website, www.irs.gov, to find bona fide charities to which contributions are deductible).
  1. Don’t give out your financial or personal information, if you can’t be sure that data won’t be misused.
  1. Don’t give cash. Make donations by check, credit card or some other way that can be documented. And never make out a check in the name of the solicitor.

Scammers may claim to be affiliated with known organizations; sometimes they even use the official logo of a government or relief organization to gain a target’s trust.

Do your own research to be sure you know where your money is going. Keep your scam radar on high: Refuse solicitors who won’t answer questions about their cause; don’t give in to high pressure pitches; and if it’s a telephone solicitation, ask if the caller is a paid solicitor and, if so, what percent of money raised actually goes to the cause. You can always ask that your name be removed from a call list.

Scammers work other angles, too. Some file claims for storm damage that never occurred. Others claim to be doctors and ask for funds “to pay medical bills of injured people.” Once you give in to a phony solicitor, you can bet your name will be shared with other scammers.

Check websites like Charity Navigator and Guidestar that rate the effectiveness of charities. The Better Business Bureau’s Wise Giving Alliance is another resource.

In Maine, check with the Charitable Solicitations Program, part of the state’s Department of Professional and Financial Regulation; call 624-8525 with questions about licensed solicitors or to file a complaint.

If you suspect someone’s perpetrating disaster fraud, notify the U.S. Department of Justice’s National Center for Disaster Fraud (toll-free, 866-720-5721). For charity fraud on the web, notify the Internet Crime Complaint Center ( www.ic3.gov), a partnership of the FBI and the National White Collar Crime Center.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer 04412, visit http://necontact.wordpress.com or email contacexdir@live.com.

 

Ads disguised as news provoke outrage

CONSUMER FORUM

By Russ Van Arsdale, Executive Director, Northeast Contact
Posted April 01, 2012, at 10:35 a.m.

On reading the full-page ad in Wednesday’s Bangor Daily News, I reacted with confusion, disbelief and a bit of outrage. I knew I would have to question the editors on this and expected they might respond defensively; I did not expect they would be contrite.

The ad in question offered sheets of uncut dollar bills “at face value,” contingent on buying three “protective banker’s portfolios” at a cost of $29 each plus shipping. The ad said “smart collectors are snatching up all the valuable uncut sheets of Gov’t issued money they can get their hands on,” although a disclaimer at the bottom admitted there’s no guarantee of increased future value.

Such a come-on probably would have been dismissed, if what was clearly labeled an advertisement had not looked, to the casual reader, like a news story. “Bangor area zip codes turn up cash for residents,” cried the headline under the large photo of uniformed guards wheeling around loads of the bill sheets. A Google search of the headline wording — minus the Bangor reference — yields hundreds of communities where similar ads have run in the United States and Canada.

Those ads have drawn fire from consumer groups and authorities alike. Last November, the Better Business Bureau reported more than 200 consumer complaints involving World Reserve Monetary Exchange, which placed the BDN ad. According to the Better Business Bureau many of those complaining said the ads were misleading. The bureau noted the ads suggest the offer is limited to a specific geographic area, which is not the case. A supposed time limit on the offer also created a false sense of urgency.

In January, a California lawsuit against Universal Syndications Inc., doing business as World Reserve Monetary Exchange, and Arthur Middleton Capital Holdings CEO Rodney Napier was settled. The firm was accused of falsely advertising “free” gold coins; it was ordered to pay $223,000 in civil penalties and court costs and to reimburse some buyers. The company also is banned from advertising in California the gift of a free item with the purchase of another item, unless it really is free.

We did some digging to find all this out. The Bangor Daily News did some initial vetting when the ad order came in. Steve Martin, BDN’s interim director of sales and marketing, told me the vetting process in this case wasn’t thorough enough.

Martin said the ad won’t be run again. In fact, he’s asking the ad agency that sent it not to send any similar ads to the paper.

“The sources [of such ads] are getting craftier and craftier” in their efforts to make ads look like news coverage, Martin said. He added the paper takes very seriously its duty not to mislead the public, and said every effort will be made to distinguish advertising from news copy in the future.

After spending most of my career as a working reporter, I know how these things can happen. We applaud the BDN for admitting a mistake and working to make sure it’s not repeated.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s membership-funded, nonprofit consumer organization. Individual and business memberships are available at modest rates. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer 04412, or go to necontact.wordpress.com, or email contacexdir@live.com.

Dirty Dozen tax scams of 2012

CONSUMER FORUM

By Russ Van Arsdale, Executive Director, Northeast Contact
Posted Feb. 25, 2012, at 4:02 p.m.

Seal of the United States Internal Revenue Ser...

If you file your federal income tax return early, good for you. If the Internal Revenue Service informs you that it received two tax returns with your name on them, you have been a victim of the most frequent kind of tax scam.

The IRS has just released its “Dirty Dozen” list for 2012. Not surprisingly, identity theft (our example above) is the most frequent type of tax fraud.

It’s something IRS officials say they’re working constantly to deter; the agency says last year it protected taxpayers from roughly $1.4 billion that identity thieves had been trying to steal.

In January, the IRS released the results of a nationwide crackdown on ID theft. The IRS joined forces with the federal Justice Department’s Tax Division and local U.S. Attorneys offices, targeting 105 people in 23 states. If you think your information has been stolen and used for fraudulent tax purposes, visit the special identity theft page at www.IRS.gov/identitytheft.

Number two on the Dirty Dozen list is phishing, the technique ID thieves often use to try to collect people’s personal information. Phony emails or fake websites might solicit information to “help increase your refund” or “provide necessary information.” The IRS does not initiate correspondence through email, and recipients should not respond to such solicitations.

Investigators also report cases of fraudulent activity on the part of some tax preparers. While most people in that business are scrupulously honest, some do try to cut corners and some flagrantly violate the law. Failing to sign or put a Preparer Tax ID number on your return, promising larger than normal refunds or demanding that you split the refund are all examples of unethical behavior by a tax preparer.

Some people who advertise as tax advisers are simply hucksters. They might claim they can get “free money” from the IRS or unusual benefits from Social Security. Other scammers may urge you to make outrageous claims to avoid paying taxes; while it’s within your rights to challenge a tax bill, you can’t simply disobey the law about paying taxes you owe.

Some citizens try to hide money in offshore accounts, despite two widely publicized efforts by the IRS to crack down on tax evaders. The agency said in January that its efforts so far have resulted in the collection of $4.4 billion and that those efforts are ongoing.

Other tax dodging schemes include filing false 1099 forms, or claiming income not received in an effort to get a refund to which the person is not entitled. Another scam is claiming zero income, in hopes of dodging all tax liability. Over-valuing one’s charitable contributions is yet another violation prompting IRS scrutiny.

Disguising the true ownership of corporations is another common tax scam.

The IRS and the states work to discourage such tactics and find out who really is on the hook for business taxes.

Rounding out the list is the misuse of trusts. IRS officials say the improper use of private annuity trusts and foreign trusts is on the rise, often due to promises of tax shelters which may not be realized. The IRS urges people to consult competent advisers before entering into trust arrangements.

For more, visit the Internal Revenue Service website, www.irs.gov and search “Dirty Dozen 2012.”

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s membership-funded, nonprofit consumer organization. Individual and business memberships are available at modest rates. For assistance with consumer-related issues, including consumer fraud and identity theft, or for more information, write: Consumer Forum, P.O. Box 486, Brewer 04412, go to necontact.wordpress.com, or email contacexdir@live.com.

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