In the hope of preventing our Members from becoming victims of monetary scams, we will continually update this section with recent examples of attempted fraud that have involved IBM Southeast EFCU or our Members.

 

• Adjust your internet settings to prevent your computer from installing programs automatically from the Internet or launching them automatically from email. Once you’ve disabled the automatic installation, you should see a prompt anytime an application attempts to install itself. Do not click OK, Yes, or Run This Program if prompted unless you trust the program and are fully aware of its purpose.
• Update your operating system frequently. If you use windows, visit the Windows Update site and install patches marked “critical.”
• Configure your browser to use a higher security setting. In Internet Explorer, choose “Tools” >> “Internet Options,” and select the “Security” tab. Make sure that the Internet Zone is configured to Medium Security or above.
• Avoid downloading software from non-trusted web sites, such as “warez” (illegal software) sites.
• Install a firewall. Firewalls keep programs from contacting the Internet without your permission. Adware and Spyware cannot function without sending information from your computer to the Internet.
• Scan your computer for Spyware. One free program is Spybot Search and Destroy (http://www.safer-networking.org/en/index.html). Ad-Aware is another good tool to eliminate Adware programs (http://www.lavasoftusa.com/).  

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The Better Business Bureau urges consumers to look out for new Grant scams:

1. Phishing
Phishing is a tactic used by Internet-based scam artists to trick unsuspecting victims into revealing personal or financial information. The criminals use the information to steal the victim’s identity, access bank accounts, run up credit card charges or apply for loans in the victim’s name.  Phishing scams often take the form of an email that appears to come from a legitimate source, including the IRS. The IRS never initiates unsolicited email contact with taxpayers about their tax issues. Taxpayers who receive unsolicited emails that claim to be from the IRS can forward the message to phishing@irs.gov. Further instructions are available at http://www.irs.gov/privacy/article/0,,id=179820,00.html  To date, taxpayers have forwarded scam emails reflecting thousands of confirmed IRS phishing sites. If you believe you have been the target of an identity thief, information is available at http://www.irs.gov/privacy/article/0,,id=186436,00.html

2.  Hiding Income Offshore
The IRS aggressively pursues taxpayers and promoters involved in abusive offshore transactions. Taxpayers have tried to avoid or evade U.S. income tax by hiding income in offshore banks, brokerage accounts or through other entities. Recently, the IRS provided guidance to auditors on how to deal with those hiding income offshore in undisclosed accounts. The IRS draws a clear line between taxpayers with offshore accounts who voluntarily come forward and those who fail to come forward.  Taxpayers also evade taxes by using offshore debit cards, credit cards, wire transfers, foreign trusts, employee-leasing schemes, private annuities or life insurance plans. The IRS has also identified abusive offshore schemes including those that involve use of electronic funds transfer and payment systems, offshore business merchant accounts and private banking relationships.

3. Filing False or Misleading Forms
The IRS is seeing scam artists file false or misleading returns to claim refunds that they are not entitled to. Frivolous information returns, such as Form 1099-Original Issue Discount (OID), available at http://www.irs.gov/pub/irs-pdf/f1099oid.pdf , claiming false withholding credits are used to legitimize erroneous refund claims. The new scam has evolved from an earlier phony argument that a “Strawman” bank account has been created for each citizen. Under this scheme, taxpayers fabricate an information return, arguing they used their “strawman” account to pay for goods and services and falsely claim the corresponding amount as withholding as a way to seek a tax refund.

4. Abuse of Charitable Organizations and Deductions
The IRS continues to observe the misuse of tax-exempt organizations. Abuse includes arrangements to improperly shield income or assets from taxation and attempts by donors to maintain control over donated assets or income from donated property. The IRS also continues to investigate various schemes involving the donation of non-cash assets, including easements on property, closely-held corporate stock and real property. Often, the donations are highly overvalued or the organization receiving the donation promises that the donor can purchase the items back at a later date at a price the donor sets. The Pension Protection Act of 2006 imposed increased penalties for inaccurate appraisals and new definitions of qualified appraisals and qualified appraisers for taxpayers claiming charitable contributions.

5. Return Preparer Fraud
Dishonest return preparers can cause many headaches for taxpayers who fall victim to their ploys. Such preparers derive financial gain by skimming a portion of their clients’ refunds and charging inflated fees for return preparation services. They attract new clients by promising large refunds. Taxpayers should choose carefully when hiring a tax preparer. More information is available on http://www.irs.gov/newsroom/article/0,,id=202123,00.html . As the saying goes, if it sounds too good to be true, it probably is. No matter who prepares the return, the taxpayer is ultimately responsible for its accuracy. Since 2002, the courts have issued injunctions ordering dozens of individuals to cease preparing returns, and the Department of Justice has filed complaints against dozens of others, which are pending in court.

6. Frivolous Arguments
Promoters of frivolous schemes encourage people to make unreasonable and unfounded claims to avoid paying the taxes they owe. The IRS has a list of frivolous legal positions at http://www.irs.gov/pub/irs-drop/n-08-14.pdf  that taxpayers should stay away from. Taxpayers who file a tax return or make a submission based on one of the positions on the list are subject to a $5,000 penalty. More information is available on http://www.irs.gov/taxpros/article/0,,id=159853,00.html.

7. False Claims for Refund and Requests for Abatement
This scam involves a request for abatement of previously assessed tax using Form 843, Claim for Refund and Request for Abatement, available at http://www.irs.gov/pub/irs-pdf/f843.pdf . Many individuals who try this have not previously filed tax returns. The tax they are trying to have abated has been assessed by the IRS through the Substitute for Return Program. The filer uses Form 843 to list reasons for the request. Often, one of the reasons given is "Failed to properly compute and/or calculate Section 83-Property Transferred in Connection with Performance of Service.”

8. Abusive Retirement Plans
The IRS continues to uncover abuses in retirement plan arrangements, including Roth Individual Retirement Arrangements (IRAs). The IRS is looking for transactions that taxpayers are using to avoid the limitations on contributions to IRAs as well as transactions that are not properly reported as early distributions. Taxpayers should be wary of advisers who encourage them to shift appreciated assets into IRAs or companies owned by their IRAs at less than fair market value to circumvent annual contribution limits. Other variations have included the use of limited liability companies to engage in activity which is considered prohibited.

9. Disguised Corporate Ownership
Some taxpayers form corporations and other entities in certain states for the primary purpose of disguising the ownership of a business or financial activity. Such entities can be used to facilitate underreporting of income, fictitious deductions, non-filing of tax returns, participating in listed transactions, money laundering, financial crimes, and even terrorist financing. The IRS is working with state authorities to identify these entities and to bring the owners of these entities into compliance.

10. Zero Wages
Filing a phony wage- or income-related information return to replace a legitimate information return has been used as an illegal method to lower the amount of taxes owed. Typically, a Form 4852, Substitute Form W-2, available at http://www.irs.gov/pub/irs-pdf/f4852.pdf or a “corrected” Form 1099 is used as a way to improperly reduce taxable income to zero. The taxpayer also may submit a statement rebutting wages and taxes reported by a payer to the IRS. Sometimes fraudsters even include an explanation on their Form 4852 that cites statutory language on the definition of wages or may include some reference to a paying company that refuses to issue a corrected Form W-2 for fear of IRS retaliation. Taxpayers should resist any temptation to participate in any of the variations of this scheme.

11. Misuse of Trusts
For years, unscrupulous promoters have urged taxpayers to transfer assets into trusts. While there are many legitimate, valid uses of trusts in tax and estate planning, some promoted transactions promise reduction of income subject to tax, deductions for personal expenses and reduced estate or gift taxes. Such trusts rarely deliver the promised tax benefits and are being used primarily as a means to avoid income tax liability and hide assets from creditors, including the IRS.  The IRS has recently seen an increase in the improper use of private annuity trusts and foreign trusts to divert income and deduct personal expenses. As with other arrangements, taxpayers should seek the advice of a trusted professional before entering into a trust arrangement.

12. Fuel Tax Credit Scams
The IRS is receiving claims for the fuel tax credit that are unreasonable. Some taxpayers, such as farmers who use fuel for off-highway business purposes, may be eligible for the fuel tax credit. But some individuals are claiming the tax credit for nontaxable uses of fuel when their occupation or income level makes the claim unreasonable. Fraud involving the fuel tax credit is considered a frivolous tax claim, potentially subjecting those who improperly claim the credit to a $5,000 penalty.

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• Do you have any reason to suspect that this check is not valid?
• Have you recently advertised something for sale or purchased something over the Internet? If so, is this check payment for that item?
• Have you been asked to wire, or otherwise return, a portion of the funds back to the sender or some other third party?
• Have you recently received an email or letter stating you have won a sweepstakes or lottery? Are they claiming that all you need to do to collect your prize is provide them with your account number and other personal information so they can wire the funds into your account?
• Have you recently accepted a job offer over the internet and received a payroll advance by check, or were asked for your personal information in order to process a wire into your account? Were you asked to return a portion of the payment for tax purposes?

Please be advised: If a Cashier’s or Official Check is returned as a counterfeit or forgery, the Credit Union will have no choice but to hold you liable for the loss. Your assistance in the prevention of Check Fraud and Identity Theft is greatly appreciated. Please let us know if you have any questions or need more detailed information.

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Click here for examples of recent phishing scams targeting Credit Union Members.

If you get an email warning you that an account of yours will be shut down unless you confirm your billing information, do not reply or click on the link in the email. Instead, contact the company named in the email using a telephone number or Web site address you know to be genuine. IBM Southeast EFCU would never initiate an email asking for your personal information. However, for identification purposes we may request information in response to an inquiry from you. Please call us at (800) 873-5100 or (561) 982-4700 if you feel uncertain about the validity of an email you have received from us.

If you receive a fraudulent email, report the suspicious activity to the FTC by forwarding the email to spam@uce.gov. If you believe you've been scammed, file your complaint at www.ftc.gov, and then visit the FTC's Identity Theft Web site (www.ftc.gov/idtheft) to learn how to minimize your risk of damage from identity theft.

Visit www.ftc.gov/spam to learn other ways to avoid email scams and deal with deceptive spam.

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