IRS Warns of Scams Designed to Steal FATCA-Related Account Data


The large number of callers posing as the IRS and demanding payment is not the only IRS scam you have to be aware of. Now, there is a "FATCA scam" too, warns the IRS.


There are scammers out there who have found that if they combine your fear and ignorance* of the US tax code, they're able to part you with your hard-earned savings. They call and pose as the IRS and pitch to the unsuspecting: "You owe us $5,000; if you do not pay us, we will have you arrested."

*We don't mean to imply that you are ignorant. We just know that the US tax code is the single most complicated and convoluted system in the history of time. Even Einstein agrees


People have fallen prey to this scam because, well… what part of it sounds completely far-fetched? Think about it. We know the IRS assesses people taxes. We know the IRS speaks the English language, but they do not speak English in a way that most people can understand. We know the IRS is the most powerful collection agency in the world. And, we know the IRS and the Department of Justice will put people behind bars for unpaid taxes.


So, that's one scam. But now there's another.



FATCA is the Foreign Account Tax Compliance Act, a 2010 law, which was passed in an effort to increase tax collections on Americans using shelters abroad. What is has turned into is a system that penalizes unsuspecting taxpayers who, for valid reasons, have money in overseas accounts. If a US taxpayer has money in overseas accounts, they may have to report these accounts on a form called the FBAR; and if they don't, there are severe penalties (even if no taxes are owed!).


FATCA is relatively new. Not everyone knows about it, and very few people that do know about it understand it completely. This makes the opportunity ripe for this new FATCA scam.


From an IRS press release:


IRS Warns Financial Institutions of Scams Designed to Steal FATCA-Related Account Data 


WASHINGTON — The Internal Revenue Service today issued a fraud alert for international financial institutions complying with the Foreign Account Tax Compliance Act (FATCA). Scam artists posing as the IRS have fraudulently solicited financial institutions seeking account holder identity and financial account information.

The IRS does not require financial institutions to provide specific account holder identity information or financial account information over the phone or by fax or email. Further, the IRS does not solicit FATCA registration passwords or similar confidential account access information.


“Tax scams using the IRS name can take many forms and they are not limited by national borders,” said IRS Commissioner John Koskinen. “People should always be cautious before sending sensitive information to anyone.”


Financial institutions directly registered to comply with FATCA, and those in jurisdictions that are treated as having in effect intergovernmental agreements (IGAs) to implement FATCA through intergovernmental cooperation, have been approached by persons representing themselves as the IRS. The IRS has reports of incidents from multiple countries and continents.


If you receive an IRS scam call, report it here. For some helpful hints on how to know if the person calling you is a scammer, watch the video below.