Fake IRS Refunds: The Latest Tax Scam
Each year, the IRS publishes the ‘dirty dozen,’ a list of the top twelve scams hitting taxpayers. Making this year’s list is the false tax refund scam. A growing number of identity thefts are from tax preparers with lax data security. Regardless of how they access your personal information, the scammers file a fake tax return in your name and then put a REAL refund into your bank account.
The False Refund Tax Scam
The scammer contacts you, posing as a law enforcement officer or IRS agent. The person claims the refund was a mistake and must be paid back. Hackers have even developed automated messages threatening their victims with arrest warrants, criminal charges or social security blacklisting if the refunds are not sent back. These calls usually give a case number and phone number where you can return the money. Don’t fall for it.
Keep an eye on your bank account this tax season. If you see a refund amount different than what’s on your filed tax return, take action according to the type of refund:
- Direct Deposit – Contact the Automated Clearing House of the bank where the direct deposit was sent.
- Check – Write ‘VOID’ on the endorsement line on the back of the check. Immediately return it to the IRS location listed on the check. The city will be listed on the bottom text line, in front of the words ‘tax refund’. This IRS Scam Alert article lists IRS mailing addresses for returning paper checks. If you’ve cashed the check, you will need to contact the office to repay it and inform the IRS of the scam.
How to avoid the false refund scam?
- Ask your tax preparer about their data security. The IRS publication, Safeguarding Taxpayer Data, outlines their legal requirements and data security best practices.
- File as early as possible. This has shown to reduce the likelihood of fraud.
- Monitor your bank account for a refund deposit amount that doesn’t match the return you filed.
- Don’t cash a refund check unless it matches the return you filed. Return it to the IRS and alert them to the discrepancy.
- Be suspicious of email from the IRS. This is almost always a scam. The IRS does not contact taxpayers via email.