The Newest Scam to Steal Your Tax Refund
February 21 2018
Instead of simply calling vulnerable taxpayers posing as the IRS and demanding money, scammers have turned to more sophisticated tactics. The IRS now warns of the newest scam. Scammers file fraudulent returns, sending the tax refund to the victim, and then demanding it back. In turn, this scam causes a bigger headache for the unwitting taxpayer. The tax payer must reverse the tax return file paperwork, meaning your legitimate tax refund will take even longer to receive. Below we provide the details and how you can avoid falling into the scammer’s most recent trap.
How Does the Newest Scam Work?
The long-winded scam works like this: Scammers steal taxpayer data from tax professionals via phishing, and file a fraudulent tax return. This consequently results in a tax refund deposit in the victim’s account. The scammer then contacts the victim claiming to be the IRS, and demands that the tax refund be returned to their collection agency. The victim will hand it over, as they did not file their tax return. The call might be directly from a person pretending to be from the IRS or another law enforcement agency, or it might be a threatening automated call, claiming that your Social Security number will be blacklisted unless you forward the money to a collection agency.
Why do scammers go about stealing taxpayer money this way? They know that since they are using legitimate data, it will be harder to track the fraud and therefore stop the filing; this strategy also allows them to receive the money directly via more elaborate means than sniffing out paper checks.
How Do I Protect Myself?
Certainly, falling victim to this particular scam causes more of a headache than others. You’ve technically ‘filed’ your return and lost the refund, so you should strive to avoid this scam. The most important thing to do is contact the IRS if you receive a bogus return or if you find out your return is already filed (more on that below). Remember that the IRS will never directly call or email you about your return, even if there was a mistake. If something seems amiss, assume the worst and immediately contact the IRS.
What Do I Do If I’m A Victim?
If you’ve been a victim of the latest scam, take the following steps depending on which scenario applies. If you notice the fraudulent return was direct deposited to your bank account:
- Call the Automated Clearing House of your bank and ask them to return the funds to the IRS
- Call the IRS’s toll free number to inform them of the return and explain that your refund has been fraudulently filed
- Speak with your financial institution about changes your account number, since scammers have your current account’s information
If the refund is received as a paper check:
- Write void on the back of the check and submit it to the corresponding IRS office along with a note explaining the reason for return
- If you cashed the check, take the above steps but via a personal check or money order. If you do not have a copy of the paper check, call the IRS’s toll free number and explain the reason for return. On the personal check, include your SSN.
If you cannot file online because of a fraudulent return, file a paper tax return via Form 14039 (Identity Theft Affidavit). You’ll add an explanatory statement.
Avoiding the Newest Scam
There are now thousands of victims of this particular scheme, and fraudsters will only get more strategic with how they commit this type of theft. Safeguard your information and act quickly if you think you are a victim of identity theft.
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