Fake Insurance Tax Form Scam Aims at Stealing Data from Tax Pros, Clients 

WASHINGTON – The Internal Revenue Service today alerted tax professionals and their clients to a fake insurance tax form scam that is being used to access annuity and life insurance accounts.

Cybercriminals currently are combining several tactics to create a complex scheme through which both tax professionals and taxpayers have been victimized.

There may be variations but here’s how one scam works: The cybercriminal, impersonating a legitimate cloud-based storage provider, entices a tax professional with a phishing email. The tax professional, thinking they are interacting with the legitimate cloud-based storage provider, provides their email credentials including username and password.

With access to the tax professional’s account, the cybercriminal steals client email addresses. The cybercriminal then impersonates the tax professional and sends emails to their clients, attaching a fake IRS insurance form and requesting that the form be completed and returned. The cybercriminal receives replies by fax and/or by an email very similar to the tax professional’s email – using a different email service provider or a slight variation to the tax pro’s address.

The subject line varies but may be “urgent information” or a similar request. The awkwardly worded text of the email states:

Dear Life Insurance Policy Owner,

Kindly fill the form attached for your Life insurance or Annuity contract details and fax back to us for processing in order to avoid multiple (sic) tax bill (sic).

The cybercriminal, using data from the completed form, impersonates the client and contacts the individual’s insurance company. The cybercriminal then attempts to obtain a loan or make a withdrawal from those accounts.

The IRS reminds tax professionals to be aware of phishing emails, free offers and other common tricks by scammers. Those tax professionals who have data breaches should contact the IRS immediately through their Stakeholder Liaison. See Data Theft Information for Tax Professionals.

Individuals who receive the insurance tax form scam email should forward it to phishing@irs.gov and then delete it. Individuals who completed and returned the fake tax form should contact their insurance carrier for assistance.

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While taxpayers will not start filing their tax returns for a few months, there are a few things they can do to make the process easier next year. Here are two things that could affect the 2017 returns they will file in 2018.

1. Report name changes. Recently married or divorced taxpayers who change their name should notify the Social Security Administration. They should also notify the SSA if a dependent’s name changed.  Taxpayers need to do this so that when the taxpayer files next year, the new name on the tax return matches A mismatch between the name shown on their tax return and the SSA records can cause problems in the processing of their tax return and may even delay their tax refund.
2. Renew Individual Taxpayer Identification Numbers. Taxpayers who use an Individual Taxpayer Identification Number should check to see if their number expired in 2016 or will expire this year. If so, and they need to file a return in 2018, they should apply now to renew their ITIN to avoid certain disallowed tax credits and processing delays next year. Taxpayers who have not used their ITIN to file a federal return at least once in the last three years will see their number expire Dec. 31, 2017. Additionally, ITINs with middle digits 70, 71, 72 or 80 will also expire at the end of the year. Only taxpayers with expiring ITINs need to take any action. To renew an ITIN, a taxpayer must complete a Form W-7 and submit required documentation. No tax return is required when submitting an application to renew.

IRS YouTube Videos: 

• Changed Your Name after Marriage or Divorce? – English| Spanish | ASL

Share this tip on social media — #IRSTaxTip: What Taxpayers Can Do Now Before Filing Their Return in 2018. https://go.usa.gov/xnc5w

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