Former con artist's tips to avoid identity theft

Your Facebook (FB) profile may have all the information a fraudster needs to steal your sensitive information.

“If you’re on Facebook, here’s the only things you have to remember — never tell anybody where you were born or your date of birth,” Frank Abagnale told Yahoo Finance’s The Final Round. “That's 98% of me stealing your identity. I only need to know those two pieces of information.”

Abagnale, a former con artist famously portrayed by Leonardo DiCaprio in the film Catch Me If You Can, is out with a new book aptly entitled “Scam Me If You Can: Simple Strategies to Outsmart Today’s Rip-off Artists.” In it, he highlights the tricks that today’s scammers and con artists are using to commit fraud.

In the book, Abagnale outlines five rules of how to protect yourself from today’s scammers:

  1. Protect your identity

    Tip: Put your guard up as soon as someone says you need to share your personal or financial information with them right now — stop and verify the person you’re dealing with.

  2. Secure your finances

    Tip: Do not trust someone who tells you they always beat the market or can guarantee a certain level of returns. An honest and qualified financial planner cannot guarantee investment results.

  3. Preserve your digital presence

    Tip: Do not keep all your personal information in the cloud or on one laptop. Keep printouts of important documents in a lockbox or upload files to an external hard drive.

  4. Safeguard your home and hearth

    Tip: If you do not recognize the number calling you, do not pick it up. If you do pick up the call be sure to remain tight lipped as the con caller may be recording the call, and saying nothing usually results in the caller hanging up.

  5. Shelter your heart

    Tip: Verify that the person you are speaking with on a dating app is real. Search online to confirm claims of location, employment, and photos.

One surprising thing Abagnale notes in his book is the uselessness of passwords. He says that passwords were originally created to help secure individual time spent on computers used by multiple people, not to protect personal information or high security needs.

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Most Common Tax Scams
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Most Common Tax Scams
The IRS recently unveiled the 12 most common tax schemes and scams affecting American taxpayers in 2008.

This year's list is highlighted by Internet phishing scams and several new frivolous tax arguments.

Click through our gallery to see the "Dirty Dozen" schemes that the IRS urges taxpayers to avoid.

' An Overview by WalletPop.com
Phishing scams often take the form of an e-mail that appears to come from a legitimate source. Some scam e-mails falsely claim to come from the IRS. To date, taxpayers have forwarded more than 33,000 of these scam e-mails, reflecting more than 1,500 different schemes, to the IRS. The IRS never uses e-mail to contact taxpayers about their tax issues.
Some scam artists are trying to trick individuals into revealing information that can be used to access their financial accounts by making promises relating to the economic stimulus payment, often called a "rebate." To obtain the payment, eligible individuals in most cases will not have to do anything more than file a 2007 federal tax return. But some criminals posing as IRS reps are trying to trick taxpayers by falsely telling them they must provide information to get a payment.
Don't believe these outlandish claims: wages are not income; filing a return and paying taxes are merely voluntary; and being required to file Form 1040 violates the Fifth Amendment right against self-incrimination or the Fourth Amendment right to privacy. Taxpayers who file a return or make a submission based on one of these positions are subject to a $5,000 penalty. The "frivolous" list has been updated to include a nonexistent "Mariner's Tax Deduction," among other things.
The IRS is receiving claims for the fuel tax credit that are unreasonable. Some taxpayers, such as farmers who use fuel for off-highway business purposes, may be eligible for the fuel tax credit. But some individuals are claiming the tax credit for nontaxable uses of fuel when their occupation or income level makes the claim unreasonable. Fraud involving the fuel tax credit was recently added to the list of frivolous tax claims.
Individuals continue to try to avoid paying U.S.taxes by illegally hiding income in offshore bank and brokerage accounts or using offshore debit cards, credit cards, wire transfers, foreign trusts, employee leasing schemes, private annuities or life insurance plans.
The IRS is looking for transactions that taxpayers are using to avoid the limitations on contributions to Roth IRAs. Taxpayers should be wary of advisers who encourage them to shift appreciated assets into Roth IRAs or companies owned by their Roth IRAs at less than fair market value. In one variation of the scheme, a promoter has the taxpayer move a highly appreciated asset into a Roth IRA at cost value, which is below annual contribution limits even though the fair market value far exceeds the amount allowed.
Typically, a Form 4852 (Substitute Form W-2) or a "corrected" Form 1099 is used as a way to improperly reduce taxable income to zero. The taxpayer also may submit a statement rebutting wages and taxes reported by a payer to the IRS. Sometimes fraudsters even include an explanation on their Form 4852 that cites statutory language on the definition of wages or may include some reference to a paying company that refuses to issue a corrected Form W-2 for fear of IRS retaliation.
This scam involves a request for abatement of previously assessed tax using Form 843, "Claim for Refund and Request for Abatement." Many individuals who try this have not previously filed tax returns. The tax they are trying to have abated has been assessed by the IRS through the Substitute for Return Program. The filer uses Form 843 to list reasons for the request. Often, one of the reasons given is "Failed to properly compute and/or calculate Section 83-Property Transferred in Connection with Performance of Service."
These scam artists make their money by skimming a portion of their clients' refunds and charging inflated fees for return preparation services. They attract new clients by promising large refunds. Some preparers promote the filing of fraudulent claims for refunds on items such as fuel tax credits to recover taxes paid in prior years. Taxpayers should choose carefully when hiring a tax preparer, especially one who promises something that seems too good to be true.
Some people are going as far as forming domestic shell corporations in certain states for the purpose of disguising the ownership of a business or financial activity. Once formed, these anonymous entities can be used to facilitate underreporting of income, non-filing of tax returns, engaging in listed transactions, money laundering, financial crimes and even terrorist financing. The IRS is working with state authorities to identify these entities and to bring the owners of these entities into compliance.
For years, unscrupulous promoters have urged taxpayers to transfer assets into trusts. They promise reduction of income subject to tax, deductions for personal expenses and reduced estate or gift taxes. However, some trusts do not deliver the promised tax benefits. As with other arrangements, taxpayers should seek the advice of a trusted professional before entering into a trust.
The IRS continues to observe the misuse of tax-exempt organizations. Misuse includes arrangements to improperly shield income or assets from taxation, attempts by donors to maintain control over donated assets or income from donated property and overvaluation of contributed property. In addition, IRS examiners are seeing an upturn in instances where taxpayers try to disguise private tuition payments as contributions to charitable or religious organizations.
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Tax Audit Red Flags


If you think you have to be caught stowing away cash in an offshore bank account to trigger an audit, you better think again. One tiny error on your return can have the IRS knocking on your door. In 2007, the IRS audited approximately 1.4 million returns, a 7% increase from 2006 and the highest number on record since 1998.

Here are five common red flags that catch the IRS's eye and how to avoid them.
Five Tax Audit Red Flags
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“Passwords are for treehouses ... If you look at ransomware breaches, malware, [breaches] all come from passwords. So I’ve been a big advocator of eliminating passwords” Abagnale said. “I think you’re starting to see more and more companies, retailers, merchants, eliminating the need for passwords. So in the next two or three years, I don’t think we’ll be using passwords”.

Abagnale said scamming and fraud are “4,000 times easier than when I did it 50 years ago because I didn’t have all the technology that exists today, the forms of communication that exist today.”

Reserve your ticket!

Sara Dramer is an associate producer at Yahoo Finance. Follow her on Twitter @saradramer

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