Thieves have it better than ever. No longer do they need risk personal injury robbing people face-to-face. Muggers can now make their money sitting in their underpants making phone calls and hacking computers.
Case in point; our own Mike Miller received a call this morning from "US Treasury Agent John Smith, federal ID number 1007." Yes, John Smith. Nobody said these digital era criminals were smart or creative.
"Agent" Smith proceeded to tell Mike the IRS had sent him two letters and that he owes a balance of $5,748.95 from tax year 2012. Agent Smith asked Mike if he self-prepared his tax return or used a CPA firm. Mike replied that he used a CPA and that he'd go ahead and contact them today.
At this point in the conversation, Agent Smith went on to accuse the CPA of fraud and suggested Mr. Miller shouldn't call them as they wouldn’t be of any use in this matter, but he would be able to resolve it for me.
"I must have seemed skeptical at this point because he threatened me with arrest if I disconnected the call, so I hung up anyway," said Mike. Shortly after the hang-up, Agent David Williams (federal ID number 11498) called back to let Mike know the 'local authorities would be dispatched to take him into custody for being both tax delinquent and uncooperative.'
Mike's response was brilliant: "You have my address. Please send them now. I’ll be here waiting." Agent Williams hung up.
Both agents spoke with a heavy accent – possibly of Indian or southeast Asian origin. Mike proceeded to report the scam using the Treasury Inspector General’s website.
Intrigued by this brazen and obvious scam, I asked our CPA, Bryan Jones of CPA Consulting Group, to enlighten us about these phishing scams.
Eric: Bryan, have you seen this phone scam before?
Bryan: Unfortunately, this is a common scam. Several of our clients have been contacted in this manner. We've also seen phishing scams using email. They're easiest to disclaim as the IRS never initiates taxpayer communications through email.
Eric: What sort of strategies do you use to protect your clients from identity theft?
Bryan: We rely on the best IT consulting firm in the south to help us with that. We never email personal information without using encryption technologies. We use the best firewalls, antivirus and malware software available and keep these updated daily. One should never send personal info via email without encryption. It’s surprising how many people don’t realize how dangerous this is. (Editor's note: that plug was completely unsolicited...)
Eric: I've heard a number of reports about fraudulently filed income tax returns. What should someone do if they suspect their personal data has been used to to file a fraudulent return?
Bryan: If you e-files a 1040 and someone has already filed a fraudulent return, it will get kicked back immediately. The taxpayer will then need to file a Form 14039 Identity Theft Affidavit. The IRS will assign that person a separate identity PIN number that is required to file their future returns. You can learn more about tax fraud activity by visiting IRS.gov.
Eric: Bryan, thanks for your helping us to inform people about these frauds.
Bryan: Happy to do it.