Watch Out for This New Tax Refund Scam!

We’re now in the middle of tax season, and with it the IRS has released a warning about a new scam that targets tax professionals, files fake returns, and has taxpayers sending refund money straight into the scammer’s account.

To help keep your accounts safe, here’s how to spot the scam and what to do should you become a victim.

The Scam

If you’re a tax professional, the scam starts with you.

Using phishing tactics, crooks begin by collecting client account data, before filing a fake tax return using the client’s bank account number. As soon as the refund is deposited by the IRS, however, the taxpayer is then contacted by the thieves (now posing as the IRS or other officials), notified of the error, and asked to return the money to a prescribed account – sending it straight into the scammers’ wallets.

As the scam involves real client data, it’s a hard scheme for the IRS detect, while should the taxpayer doublecheck the validity of the crook’s claim, the presence of an actual fraudulent refund in their account seems to corroborate the story.

What to Do if You’re a Victim

If you notice an erroneous tax refund in your account, and/or are contacted via phone or email by the “IRS” asking you to return the money, here’s what to do to help keep your account secure and avoid being scammed:

Refund Type:	Steps to Return Erroneous Refund:
For Direct Deposit Refunds…	Contact your bank’s ACH and schedule to have the deposit returned to the IRS. Call the IRS at +1(800) 829-4933 (business) or +1(800) 829-1040 (individual) to explain the situation.
For Paper Check Refunds…	Write “Void” where you would normally sign the back of the check. Send the check back to the same IRS location you receive it from, including a note explaining why you’re returning it.
For Paper Check Refunds You’ve Already Cashed…	Send a money order/check to the same IRS location you received the refund from as soon as possible to avoid interest fees, labeling the check as “Payment of Erroneous Refund”. (Note: if you no longer have the original check, you can call the IRS using the numbers above for the location.) Include a note stating why you’re returning the money, your taxpayer ID, and the tax period the refund was issued.

And remember: always contact your bank if you think you’ve been scammed, as your account number could be compromised!

 

(Article based off of this by Kelly Philips Erb.)