Passing on this warning from your friendly neighborhood IRS.   I'm not a tax lawyer, and you can't rely on this warning to avoid any penalties the taxman might hit you with should you run afoul of this scheme (or make any other tax errors). Best advice:  don't fall for the too-good-to-be-true offers, especially where the IRS is supposedly passing out free money.  The (very) few tax breaks in the tax code that benefit ordinary people in the 99% are well-known and widely publicized.  So if you get told something by one guy that seems like a great deal but you've never heard of it before, be sure to check it yourself by running the idea past a few other independent sources, like your local library or senior tax volunteers service.

IR-2012-29, March 2, 2012

WASHINGTON –– The Internal Revenue Service today warned senior citizens and other taxpayers to beware of an emerging scheme tempting them to file tax returns claiming fraudulent refunds. 

The scheme carries a common theme of promising refunds to people who have little or no income and normally don’t have a tax filing requirement. Under the scheme, promoters claim they can obtain for their victims, often senior citizens, a tax refund or nonexistent stimulus payment based on the American Opportunity Tax Credit, even if the victim was not enrolled in or paying for college.

In recent weeks, the IRS has identified and stopped an upsurge of these bogus refund claims coming in from across the United States. The IRS is actively investigating the sources of the scheme, and its promoters may be subject to criminal prosecution.

“This is a disgraceful effort by scam artists to take advantage of people by giving them false hopes of a nonexistent refund,” said IRS Commissioner Doug Shulman. “We want to warn innocent taxpayers about this new scheme before more people get trapped.”

Typically, con artists falsely claim that refunds are available even if the victim went to school decades ago. In many cases, scammers are targeting seniors, people with very low incomes and members of church congregations with bogus promises of free money.

The IRS has also seen a variation of this scheme that incorrectly claims the college credit is available to compensate people for paying taxes on groceries.

The IRS has already detected and stopped thousands of these fraudulent claims. Nevertheless, the scheme can still be quite costly for victims. Promoters may charge exorbitant upfront fees to file these claims and are often long gone when victims discover they’ve been scammed. 

The IRS is reminding people to be careful because all taxpayers, including those who use paid tax preparers, are legally responsible for the accuracy of their returns, and must repay any refunds received in error. 

To get the facts on tax benefits related to education, go to the Tax Benefits for Education Information Center on IRS.gov.

To avoid becoming ensnared in this scheme, the IRS says taxpayers should beware of any of the following:

• Fictitious claims for refunds or rebates based on false statements of entitlement to tax credits.
• Unfamiliar for-profit tax services selling refund and credit schemes to the membership of local churches.
• Internet solicitations that direct individuals to toll-free numbers and then solicit social security numbers.
• Homemade flyers and brochures implying credits or refunds are available without proof of eligibility.
• Offers of free money with no documentation required.
• Promises of refunds for “Low Income – No Documents Tax Returns.”
• Claims for the expired Economic Recovery Credit Program or for economic stimulus payments. 
• Unsolicited offers to prepare a return and split the refund. 
• Unfamiliar return preparation firms soliciting business from cities outside of the normal business or commuting area.

This refund scheme features many of the warning signs IRS cautions taxpayers to watch for when choosing a tax preparer. For advice on choosing a competent tax professional, see  Tips for Choosing a Tax Return Preparer on IRS.gov.

For additional information on tax scams, see the 2012 Dirty Dozen list.

In the never-ending Darwinian struggle of predators and their intended prey, the phishing scammers (the people who try to gull you into revealing sensitive information to them by sending you a convincing but deceptive email that baits the trap so that you will click on a weblink or download a destructive file) are getting better and better, meaning that those of us who don't want to be prey need to more perceptive and careful all the time.  Below is today's first scam.

What's interesting is how good the email looks -- but when you hover your mouse over the baited link (DON'T CLICK UNKNOWN LINKS, hover over them with the mouse to see where they will take you if you are unwise enough to click on them), it reveals a URL from Brazil (carlosbrusman.com.br).

This is a very good example of how to do it right when you try to alert customers or stakeholders about a "phishing" attempt.

"Phishing" is where the scam artist dangles a lure and tries to lure you to bite on what appears to be a safe-looking link that actually leads you to a specially-disguised website, where they get you to give them your private data, all while making it appear that they are helping you).



Willamette Valley Bank is a local institution, and this email (complete text below, image above) is a well-done warning.  Some phishing warnings are so poorly planned that you can't tell whether it's a genuine warning or more phishing. The text of the WVB warning:

Dear Client & Friend,

We recently received a communication alerting us to the fact that there may be an attempted phishing attack in progress. Because we care about the safety of our clients, we are providing you with information and steps to take if you receive this fraudulent email.

Phishing is a form of fraud that is used as an attempt to acquire personal information such as usernames, passwords, and credit card details. The most common way this is attempted is through email.

Emails have been received that reference the "eNFact" product. These emails have been directing recipients to click on a link (shown in the e-mail sample below) which will take them to a mock-Fiserv site which is believed to be installing malicious software onto computers.

The phishing attack will come in an email similar to the one that follows:

[see image above]

1. Do not open the email;

2. Do not click on the link contained in the email; clicking on any of the links contained in the email may install malicious software on your system;

3. If a link is clicked, steps should immediately be taken to protect your computer and/or network;

4. Delete the email from your "Inbox" and "Sent Items.

Please rest assured that your personal information stored on Willamette Valley Bank computers is secure and this threat does not compromise that information. If you have any questions about this at all feel free to contact us:

From a public-spirited attorney in Washington, Peter Fels, who passes on this warning from a Spokane attorney, Dick Sayre.  No reason to think it stops North of the Columbia River.

Folks, the Attorney General is accepting complaints about VA scams which are spreading over Washington like a small plague.  They are working with the VA, who is not at all amused by these goings on.  Of particular interest to the AG are non lawyers selling insurance products and/or irrevocable trusts to disabled seniors with a purpose of shielding assets from VA so as to gain acceptance for Aid and Attendance benefits, but lawyers here and in other states taking part in the scams are also a target of their investigations.

As most of you know, VA does not have a lookback or penalty for gifting assets, making this what appears to be an easy sale for the annuity sellers, who charge for the 'service' and get commissions from the trusts and annuities.  That will likely change as a consequence of this practice.

As many of you know, clients are being talked into making gifts to children, who then either put the funds into an irrevocable trust or buy an annuity 'to keep the funds safe'.   They then apply for Aid and Attendance benefits but, of course, when they later need Medicaid, they are faced with a huge penalty period and extended ineligibility.  DSHS will deny eligibility or deem assets to be in a constructive trust; however, often the client cannot get them back - it's the worst of all worlds.

I have dealt with a number of these cases, and everyone ended badly for the clients.  Here in Spokane, the VA experts are approaching AFH's and nursing homes for presentations, and are being given a warm welcome given that the money goes to the facility.   When the next one of these goes bad, I'll be visiting with some of the litigators on this list about the forseeability of injury when the facility sets these creeps up as experts for financial gain.

The agents pass themselves off as VA experts and have business entities with snappy titles.  They make huge profits for advice and healthy commissions from crappy annuities sold to desperate people without any warning of the consequences of this approach.  As most of you also know, the VA helps people apply for A&A without cost.

If you have complaints, please direct them to Brooks Clemmons or file a complaint as set out below.  Here is contact information for Brooks:

brooksc@atg.wa.gov and (509) 456-3282 (direct line)

It would be helpful to the AG if people filed a complaint online at
www.atg.wa.gov as those complaints go straight into their bank of complaints and are coordinated with similar complaints.  The AG would like to find out if there are persons or families that have been approached or have been taken in as a consequence of these unethical and fraudulent practices.

In Brooks words:  It is our fervent desire to stop this practice and stop others from being harmed.

I have filed several complaints, and I know others have as well.   I've also created some havoc with annuity companies, but most won't budge absent litigation.  Meanwhile, the client is without services or money.   It is now reaching epidemic levels, and I ask you all to refer cases to the AG so we can prevent more people from being irreparably harmed.

Dick Sayre
Sayre & Sayre, PS
Spokane

The other day I warned you about a company that has all the hallmarks of a scam debt relief con -- much like this one in NC (bolded points emphasis is mine):

RALEIGH, N.C. -- A bogus Florida law firm, which claimed it would reduce consumers’ debts by more than half, has been barred from debt-relief work in North Carolina.   Attorney General Roy Cooper announced Tuesday that under a consent judgment approved by Wake County Superior Court Judge Howard Manning,

The Consumer Law Group of Boca Raton has agreed to pay $600,000 in refunds to North Carolina customers who paid the company for help getting out of debt.   “Debt relief scams take advantage of struggling consumers, adding to their burden instead of helping them get out of debt,” Cooper said.   “I’m pleased that we’ve been able to win money back for these
consumers, money that can hopefully help them pay off bills and get on better financial footing.”
 
The $600,000 payout is on top of approximately $600,000 worth of charges the company agreed not to collect from North Carolina customers. An additional $50,000 will help cover the state's costs for work on the case.  The judgment bars CLG from marketing, soliciting or offering a debt-settlement or debt-negotiation services in North Carolina. CLG is also prohibited from claiming that its services are government-sponsored, performed by attorneys, or provide legal representation for consumers.

 Cooper’s office filed suit against CLG in October 2010 after a probe determined that more than 650 North Carolina consumers had paid CLG for debt-relief work but gotten little or no help in return.  People can continue to file complaints about CLG or other debt-relief  companies by calling the attorney general’s Consumer Protection Division at  1-877-5-NO-SCAM toll-free within North Carolina, or filling out a consumer complaint form at www.ncdoj.gov.

 “Don’t pay an upfront fee for help getting out of debt,” Cooper said.
“For real help getting your debts under control, meet with a qualified non-profit credit counselor in your local community, who won’t charge you a big fee.”

 For help finding an accredited, non-profit credit counselor, contact the National Foundation for Credit Counseling at 1-800-388-2227  or www.nfcc.org.

Below is an email I received today that is a very sophisticated attempt to steal my identity and passwords.   Note the several tell-tale signs of fraud:

1) Greeting me as "Hello customer" --- in other words, they don't actually know which name I use with Paypal.

2) Note that PayPal's actual email address is NOT @paypalus.com -- but most people don't bother looking to see whether an email is actually from who claims to have sent it (even though it is easy to spoof someone else's email address).

3) Note how concerned they are that I allow ActiveX controls for scripts -- that says that (a) they think I'm a Windows user who (b) uses Internet Explorer; and (c) that I want to allow someone out there in the wild-blue-yonder to control my computer via ActiveX controls.

• Remember, even if you are a Windows user, using Internet Explorer is asking for trouble -- it is the worst possible web browser.  Rather than a browser with security problems, it's basically a security problem with limited browser functionality.  Microsoft abuses its users by making them have IE installed for a number of its programs to work, but there's definitely no reason you have to use IE as a web browser, nor should you.  There are many good, free, stable web browsers out there that give hackers and phishers much more trouble than IE does (Firefox, Chrome, Opera to name just three).

4) Offering me a form to fill out as an attachment, rather than asking me to go to the real PayPal website to fill out a form.  (Not that you should ever click a link in an email like this to go to a website -- if you did, you'd be taken to a very convincing fake site, where they would harvest your PayPal username and password and start robbing you anyway).   The compressed (Zip) file that they attached is no doubt loaded with horrendous malware that would probably give them control of my computer and keep me from turning it off or uninstalling the malware without basically losing all my information on my hard-drive.  All this while it would read my email address book and mail similar messages to my friends and acquaintances.

So note well:

       REPUTABLE ONLINE MERCHANTS WILL NEVER SEND YOU A ZIP FILE OUT OF THE BLUE AND ASK THAT YOU OPEN IT, ESPECIALLY AFTER TURNING ON ActiveX CONTROLS!  NEVER OPEN SUCH A FILE.

Just like you would never give your credit card or social security number to someone who calls you up out of the blue and pretends to be an official person, never cooperate with anyone who sends you an email and wants you to go to a website or fill out a form for them.  It's a trap!
===============================================================


From:     paypal.com <service@paypalus.com>
    Subject:     Dear customer ,
    Date:     August 8, 2011 10:20:23 AM PDT
    Reply-To:     service@paypaluscom

    Aug. 08, 2011 08:19:03 PDT
Receipt No: 49561-8271-2241-61396
Hello customer,
Your account has been temporarily limited.

• We attached to this email a confirmation form to update your details .
• Please download and extract it .
• Submitting this form you will unlimit and restore your PayPal account .
• If you are using Internet Explorer please allow ActiveX for scripts to perform all data transfers securely .

Thank You.


Thanks for using PayPal – the safer, easier way to pay and get paid online.

****************NOTICE OF CONFIDENTIALITY*******************

This message is intended only for the use of the individual or entity to which it is addressed and may contain information that is privileged, confidential, and exempt from disclosure under applicable law. If the reader of this message is not the intended recipient or the employee or agent responsible for delivering the message to the intended recipient, you are hereby notified that any dissemination, distribution or copying of this communication is strictly prohibited. If you have received this communication in error, please notify the sender immediately and destroy this message. Thank you.

PayPal is a registered mark in the U.S. Patent and Trademark Office

--
This message has been scanned for viruses and
dangerous content by MailScanner, and is
believed to be clean.

 (This is where a .zip file containing the malware was attached)