Practical Tips to Avoid Being Caught in an IRS Phishing Trap

As a follow-up to our recent discussion of IRS-related phishing attempts, here are a few quick tips to stay out of the phishing traps:

  • In general, the IRS does not communicate with taxpayers via e-mail, so any time someone receives an e-mail from the “IRS,” they should be suspicious at the outset.
  • Even if the IRS did correspond with taxpayers via e-mail, there are some features of the following example that indicate the IRS did not send the e-mail:
    • IRS e-mail addresses end in “irs.gov” or “treas.gov”.  In the following example, the sender’s e-mail address ends in “irs.us.gov.”  Unofficial = scam.
    • When the IRS communicates with taxpayers about specific matters, the IRS addresses correspondence to specific taxpayers, not to “Beneficial Owner” or other general terms.  Red flag.
    • The following example makes a specific dollar reference ($14.850).  The use of a period, instead of a comma, in representations of currency is not a practice that is used in the United States.  Red flag.
    • There are syntax errors throughout.  IRS correspondence is not always perfectly proofread, but the IRS is usually pretty careful about standard grammar, subject/verb agreement, etc.  The following example is sloppy.  Red flag.
    • The following example uses terms that sound official, but are uncommon in tax-speak (at least in this context):  “non-resident person or business corporation,” “international withholding agents,” “exemption status,” “withholdings,” “USA tax reporting” (emphasis added).  Red flag.
    • Finally, the request asks for a copy of the taxpayer’s passport and a completed Form W-8BEN.  The IRS never solicits information this way.

As e-mail phishing scams become more widespread and show up in tax-related places, we all need to be on alert.  This is especially important for non-U.S. entities who may be less likely to be suspicious about e-mail from the “IRS.”  The typical scams try to create a sense of urgency/panic and then ask for sensitive information.  Be on the lookout.

“IRS” Phishing Example
—–Original Message—–
From: IRS [mailto:notice@irs.us.gov]
Sent: 31 March 2016 22:03
To:
Subject: For your information

Dear Beneficial Owner,

Our record indicates that you represents a non-resident person or business corporation but international withholding agents have been deducting 30% on interests paid into your foreign financial account. To this end, the United states Internal Revenue Service wish to inform that a total amount of $14.850 (Fourteen thousand, Eight Hundred and Fifty united States Dollars) was deducted from interest paid into your offshore financial account. You are hereby advised to update your exemption status to enable us discontinue further with-holdings on your foreign financial account by filing form W-8BEN, and return to us as soon as possible.

If you do not provide the information on the attached form which is needed to rectify your status after this notice, we shall consider you as a United States non resident alien, this will continue to subject all your foreign financial transactions to USA tax reporting and back up withholding and we will continue to withhold 30% of any interest paid to you.

Please find the attached formula, fill it with the information of your financial account and include a photocopy of your international passport information page to enable us process your status and effect your refund. Return the filled formula and a photocopy of your identification in PDF format via email attachment.

We appreciate your cooperation in helping us update our records. Please do not ignore this message.

Sincerely

James Vidrine
For Department of Treasury
Internal Revenue Service

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