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.

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