Washington (June 2, 2004) -- Some 2.5 million non-resident aliens who receive income from a United States source are being targeted in an identity theft scheme, the Internal Revenue Service warned.


The scam, which has surfaced in South America, Europe and the Caribbean, uses phony IRS correspondence and an altered IRS form to trick people into disclosing their personal and financial data, which is then used to steal their identity and financial assets, the IRS said.


"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," IRS Commissioner Mark W. Everson warned.


As part of the scam, an altered IRS Form W-8BEN 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 they give the requested personal and financial data.


The IRS noted that the phony W-8BEN form asks the recipient for personal and financial information such as their date of birth, Social Security number, passport number, and bank name and account number, as well as information on their spouse, children and parents. However, the real IRS form, which is used to establish the non-resident alien's foreign status and to determine whether the foreign person is subject to withholding of taxes, doesn't ask for any personal information, except, in some cases, for a Social Security or an IRS-generated Taxpayer Identification Number. In addition, the genuine forms are sent by the recipients' financial institution, not by the IRS.


The IRS has advised financial institutions to alert their overseas branches to warn their customers about this scam. Non-resident aliens who have received a fraudulent letter and form should report it to the Treasury Inspector General for Tax Administration, at www.ustreas.gov/tigta.


-- WebCPA staff

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