In IR-2018-119, the Service warned international taxpayers about a new tax scam. Fraudsters may send a letter requesting completion of Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting.
Many U.S. citizens are employed overseas. They may qualify for the Foreign Earned Income Exclusion (FEIE). In 2018, the FEIE is $104,100. With this exclusion and, for some taxpayers, an added housing exclusion, they may not have a U.S. tax obligation.
However, the tax fraudster will claim the taxpayer still needs to file Form W-8BEN. In addition, the fraudsters may ask for passport numbers and bank PIN codes.
The Service urges all taxpayers to be cautious if they receive a letter claiming to be from the IRS or a tax software company. Tax fraudsters will use personal information to steal funds from bank accounts or other property.
The IRS published three "will nots" that are designed to protect taxpayers.
- Payments The IRS will not demand payment with a specific method such as a prepaid debit card.
- Immediate The IRS will not demand immediate payment. Taxpayers have the right to administrative appeals with the IRS and even an appeal to the Tax Court.
- Arrest The IRS will not threaten immediate arrest by local police, immigration officers or other law enforcement personnel.