Washington (Aug. 5, 2004) — The Internal Revenue Service has renewed its warning about a fraudulent scheme targeting non-resident aliens who have income from a U.S. source. The IRS has seen signs the scheme is spreading in the Caribbean area. Caribbean countries in which this scheme has surfaced include Barbados, Puerto Rico, Tobago, Trinidad and the Turks & Caicos Islands. Earlier this year, the scheme appeared in South America and Europe.
The scheme uses fictitious IRS correspondence and an altered IRS form in an attempt to trick the foreign persons into disclosing their personal and financial data. The fraudulently obtained information is then used to steal the taxpayer’s identity and financial assets. The practice is called “phishing” for information.
"’Phishing’ in Caribbean waters for valuable information from potential victims is an old scam in a new place,” said IRS commissioner Mark W. Everson. "Taxpayers should be wary of strangers trying to obtain sensitive personal information, whether it's in person, over the phone, through the mail or over the Internet."
In this particular scam, an altered IRS Form W-8BEN, “Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding,” is sent with correspondence purportedly from the IRS to non-resident aliens who have invested in U.S. property, such as securities or bonds, and therefore have U.S.-sourced income. The correspondence claims that the recipient will be taxed at the maximum rate unless the requested personal and financial data is entered onto the form and the form is faxed to the phone number contained in the correspondence.
— WebCPA staff
