|Identity theft is big news these days, and we all know not to give our Social Security or credit card numbers over the telephone to strangers. But, just as we are beginning to think that we are safe from the identity scammers, the Internal Revenue Service has discovered a new scheme, which is aimed at non-resident aliens who have income from a United States source.
This scheme uses fake IRS correspondence and an altered IRS form to trick the foreign person into releasing personal and financial data, and the thieves use this information to steal the individual's identity and financial assets. The scheme has so far been found in South America, Europe, and the Caribbean, where the identity thieves have stolen financial accounts, run up charges on the victims' credit cards, applied for new loans and credit cards in the victims' name, and even filed fraudulent tax returns.
This scheme is a variation on an old scam to obtain financial information from an unsuspecting individual by pretending, either by mail or on the telephone, to be from the IRS. In this case, the thief sends an altered Form W-8BEN (Certificate of Foreign Status of Beneficial Owner for the United States Tax Withholding) to the victim, who is a non-resident alien who has investments in property in the United States such as securities and bonds and who has U.S. income. The purported IRS correspondence claims that the non-resident alien will be taxed at the maximum rate unless certain personal and financial information is added to the form and faxed to a certain telephone number. The requested information includes the victim's date of birth, social security number, passport number, bank name and account numbers, email address, telephone number, and information about the victim's spouse, children, and parents.
The thief's threat is not based on U.S. income tax law. The truth is that the rate at which a non-resident alien pays tax to the United States depends on the terms of the tax treaty that the U.S. has with that person's country.
A genuine form W-8BEN does not ask for the personal information requested by the thief, except for a social security or taxpayer identification number. In addition, the IRS does not send the genuine form to non-resident aliens. Instead, the genuine form is sent by financial institutions such as banks, brokerage firms, or insurance companies, who act as the non-resident alien's withholding agent for any income subject to U.S. income tax.
As always, the IRS warns everyone to be skeptical of anyone requesting personal or financial information over the telephone, through the mail, or through email.
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