IRS Warns Of New ID Theft Scam: The Internal Revenue Service has warned of a fraudulent scheme that uses phony bank correspondence and IRS forms in an attempt to trick taxpayers into disclosing their personal and banking data. The information is then used to steal the taxpayer’s identity and bank account deposits.

In the scam, a letter claiming to be from the taxpayer’s bank states that the "bank" is updating its records in order to exempt the taxpayer from reporting interest or having tax withheld on interest paid on his or her bank accounts or other financial dealings. The "bank" correspondence encloses a phony form that purports to come from the IRS and seeks detailed personal and financial data. The letter urges the recipient to fax the completed form to a specific number within seven days or lose the reporting and withholding exemption, resulting in withholding of 31 percent on the account’s interest.

One such phony form is labeled W-9095, Application Form for Certificate Status/Ownership for Withholding Tax. The form requests personal data that is frequently used to prove identity, including passport number and mother’s maiden name. Another form used is Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding. Although there is a legitimate IRS Form W-8BEN, the altered Form W-8BEN used by the scam promoters asks for personal information much like the W-9095.

Taxpayers who have received a fraudulent letter and form should report this to the Treasury Inspector General for Tax Administration by calling the toll-free fraud referral hotline at (800) 366-4484, faxing a complaint to (202) 927-7018 or writing to the TIGTA Hotline, P.O. Box 589, Ben Franklin Station, Washington, D.C. 20044-0589. TIGTA’s Web site is located at

Key Tax Incentives Included In Energy Bill: Key alternative energy production tax incentives from Sen. Chuck Grassley, ranking member of the Committee on Finance, have passed as part of the comprehensive energy policy bill.

"It makes sense to use the tax code to develop alternative energy," Grassley said. "Cutting taxes is an effective incentive to encourage positive, environmentally conscious ways to produce electricity. I’m glad to work with Senate leaders to advance a good, green energy package."

The tax package includes numerous alternative energy tax incentives that Grassley has championed for years, such as wind energy, biomass, biodiesel and the small ethanol producer credit. The package also includes a tax credit for the production of energy-efficient appliances and POWER -- the providing Opportunities With Effluent Renewables Act, which creates a production tax credit for electricity generated from swine and bovine waste.

IRS Issues Winter Statistics Of Income Bulletin: The just-released Winter 2001-2002 issue of the Statistics of Income Bulletin includes an analysis of individual income tax returns, details on domestic private foundations and charitable trusts, an examination of information returns by gender and age and a close look at the impact of the foreign tax credit that is used by U.S. corporations.

The bulletin examines the 127.1 million individual income tax returns filed for tax year 1999. More than 94.5 million returns, or 74.4 percent, showed some income tax liability. The average tax rate increased by approximately 0.4 percent from 1998 to 15.7 percent in 1999. The average adjusted gross income (less deficit) rose by 6.4 percent to $59,028, while average total income tax increased to $9,280, a 9.5-percent increase. Total AGI reported on taxable returns increased by 8.2 percent to $5,581 billion, while total income tax increased by 11.3 percent to $877 billion.

The report finds that the percent of AGI reported by the top 1 percent of taxpayers for 1999 increased for the sixth consecutive year to 19.5 percent. The same group accounted for 36.2 percent of the total income tax, up from 34.8 percent of the total income tax they accounted for in 1998.

United States manufacturers continued to account for the majority of foreign-source taxable income, current-year taxes and foreign tax credits. U.S. corporations in finance, insurance and real-estate businesses, the fastest growing industry segment during the 1990s, accounted for the second largest portion of foreign-source taxable income. The United Kingdom, Canada, Japan, Germany and the Netherlands, again, had the highest foreign income for U.S. corporations claiming foreign tax credits.

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