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Scams expanding to financial institutions, warns IRS

The Foreign Account Tax Compliance Act went into effect at the beginning of July. FATCA was designed to crackdown of offshore accounts. The Act requires foreign financial institutions to provide the Internal Revenue Service with information on all accounts held by U.S. taxpayers or foreign entities with substantial U.S. ownership interests.

The other thread that we’ve discussed recently on this blog is a widening IRS tax scam. IRS agent impersonators have stolen millions from individuals. The scam artists have now changed tact. They appear to have set their sights on financial institutions and FATCA-related data.

A fraud alert issued by the IRS this week explains that individuals posing as IRS agents have requested the identities of account holders and financial account information in relation to FATCA compliance.

The agency cautions that it never requests specific identity or financial account information via phone, fax or email. The IRS also does not ask for FATCA registration passwords or other confidential information used to access an account.

Reports have come into the IRS from several different countries across the world. IRS agent impersonators have allegedly approached financial institutions who directly registered to comply with FATCA as well as those in countries with intergovernmental agreements.

In addition, so-called “phishing” scams use unsolicited email and sometimes websites posing as legitimate contacts to gather financial and personal information. As with the individual taxpayer scams, these individuals posing as IRS agents do not follow the proper channels of communication. First contacts from the agency are written letters or notices.

Financial institutions and their employees should report these scams to the Treasury Inspector General for Tax Administration.

Source: IR-2014-92, "IRS Warns Financial Institutions of Scams Designed to Steal FATCA-Related Account Data," Sept. 24, 2014

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