Scam Alert: Stealing Your Rebate - and Your ID

Illustration by Mark Matcho

To a con artist, almost any news event offers an opportunity for profit. Last year, for example, even as wildfires raged across Southern California, fraudsters were sending out e-mails claiming to represent the Internal Revenue Service collecting money on behalf of fire victims.

But this time the thieves have outdone themselves, pegging scams to the new economic stimulus package even before President Bush signed the legislation in February.

Under the law, the IRS will send payments to 130 million households, including more than 20 million low-income older Americans and 250,000 disabled veterans. The checks will go out automatically starting in May to those who have filed a 1040 or 1040A tax return for 2007.

But already scammers are contacting targets by phone, saying they represent the IRS, and explaining that they can direct-deposit rebates right away—if the victim coughs up a bank account number on the spot. The truth, of course, is that the perpetrator will use that number, not to deposit funds but to steal them—or to steal the victim’s identity to commit an array of financial swindles.

Edna Lawrence, 69, of Arlington, Texas, is one target who didn’t fall for it. In early February she received several calls from a North Dakota area code; she could tell that the calls were automated, because it took a few seconds for the caller to come on the line. On several occasions, Lawrence actually talked to the IRS impostor—it was always the same man—who each time asked for her bank account number in order to direct-deposit a $400 rebate.

“He was trying to convince me,” she says. “He would be convincing, I guess, to someone who had some money coming and really needed it badly.” She says when she told the caller the real IRS wouldn’t phone her for such information, “he was irritated with me, I could tell, but not nearly as much as I was with him.”

Some fraudsters have reportedly referred specifically to “Bush refunds,” according to the Texas Attorney General’s Office, which by February had already received a number of complaints about the calls.

“We have no way of knowing how widespread this scam is,” says Michelle Lamishaw, IRS spokeswoman. But as millions of Americans await the cash payments, Lamishaw says the IRS is anticipating an increase in con jobs by phone and e-mail.

In response the agency wants to make it clear to taxpayers that “the IRS will not be calling them and will not be e-mailing them about the economic stimulus package,” Lamishaw says. “That’s just not our mode of operation. And we certainly don’t call or e-mail people and ask for personally identifiable information.”

So far the reported rebate scams have been by phone, but e-mail schemes impersonating the IRS are common. If you get a call or an e-mail claiming to come from the IRS, don’t reply. Don’t click any links or open any attachments, which could send you to an impostor website or load your computer with technology that tries to intercept financial information.

For information from the real IRS, go to www.irs.gov, or call 1-800-829-1040. File complaints about fake calls and e-mails with the IRS or your state Attorney General’s Office. For more on the stimulus payments and help with tax returns, go to www.aarp.org/stimulus.