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IRS Scam Artists Find Weak Spot In International Tax Law

If you visit the IRS website, on their list of ways to avoid tax scams, they clearly explain that the IRS will never call you for any reason. So, it is becoming common knowledge not to hand out personal information over the phone. However, this rule of thumb may be unfamiliar to foreign banks and IRS scam artists are taking advantage of it .

irs scamThe Foreign Account Tax Compliance Act is a law created with the intention of aggressively cutting down on offshore tax evasion. This four-year old law came into effect worldwide in July 2014. Already, experienced IRS scam artists are finding creative ways to make money off of it. Under the Foreign Account Tax Compliance Act, or FATCA, foreign banks must share the personal information of their account holders.

Forty-eight nations have committed to helping the United States enforce FATCA on their banks. These countries include the Cayman Islands and Switzerland, which are well known favorites for those who choose to bank in a foreign country. While it is not mandatory that all banks comply, it is likely that they will agree to comply in order to avoid a withholding tax.

While the IRS still stresses that no personal information should be shared with them via phone and fax, this is not common knowledge to all banks across the globe. This means that anyone stating that they work for the IRS over the phone could easily access everything from account balances to Social Security numbers, if the bank employees that they are dealing with are unfamiliar with IRS scam tactics. Not only does this create a weak spot in foreign bank accounts, it could grant IRS scam artists access to many other areas of a person’s finances.

This can be unnerving for those who have put their trust in banks hundreds to thousands of miles away. It will be up to foreign banks to become accustomed to how the IRS communicates and learn to avoid the scams that many Americans have fallen prey to over the years. Those who hold accounts in foreign countries may wish to research their bank’s policies regarding FATCA, as well as the bank’s experience with and knowledge of the IRS and IRS scams.

The IRS commissioner, John Koskinen, has already made a statement in response to this new IRS scam by stressing that IRS scams “can take many forms and they are not limited by national borders.” He also went on state what so many Americans learned too late. Always be incredibly cautious before sending personal information to anyone, even someone who sounds official.