Got A Tax Refund? Don't Fall For This Insidious New Scam

Got A Tax Refund? Don't Fall For This Insidious New Scam

Chloe Seaman
April 10, 2018

Tax Day is almost here, and millions of Americans have already filed their forms and received refunds from the IRS. And wherever money is involved, there are criminals who want to get their hands on it.

Most people know to be wary of any strange numbers that call them claiming to be a collector from the Internal Revenue Service – the IRS always sends notice of tax debt by mail before calling an individual taxpayer, and the agency never requests payment information or make threats and demands over the phone. That’s why today’s tax fraudsters are taking a sophisticated new approach, and it’s one that’s surprisingly easy to fall for.

The Washington Post reported a troubling new trend involving fraudulent tax refunds. Criminals obtain detailed taxpayer data, including bank account and routing numbers, by hacking tax professionals’ databases. They file a fraudulent tax return with the IRS and have the refund deposited into the victim’s real bank account.

The victim then receives a phone call from a “debt collection agency” attempting to collect the erroneously issued refund on behalf of the IRS. In some cases, the fraudster will leave a voicemail threatening the victim with criminal fraud charges and arrest if they don’t call back to arrange for the return of the refund check.

The thousands of people who have been impacted by this scam now face a frightening prospect: A criminal now has access to not only their Social Security number and personal details, but their entire bank account as well. The Washington Post notes that victims will need to close their bank accounts, alert their tax preparer, and contact the actual IRS to return the erroneous refund.

Of course, this is far from the only scheme involving tax returns. Phishing scams, identity theft, return preparer fraud, and other dirty tax scams have led to countless Americans being ripped off and cheated out of their rightful refunds.

Here are a few things you can do to avoid becoming the next victim of a tax-related swindle:

1. Create An Online Account With The IRS

By signing up for an online IRS account, you can monitor any activity related to your tax returns and refunds. You’ll be able to see if someone has attempted to file a return in your name, and if they have, you can contact the IRS and set things straight before a refund is issued or some criminal attempts to contact you. Click here to get started.

2. Use A Reputable Tax Professional

While you may take the DIY tax filing route with a program like TurboTax, it’s worth it to entrust this important financial task to a trusted CPA or tax preparer. In addition to filing your taxes accurately and getting you the biggest refund, this person can provide an additional line of defense should a fraudster try to target you.

3. Stay Up To Date On The Latest Tax Scams

The best way to protect yourself from tax fraud is to stay educated about the cons that exist and learn the warning signs. If you receive a suspicious phone call or email, use your common sense and consider whether the person or agency contacting you is legitimate. Immediately reach out to your tax preparer or the IRS if you have reason to be concerned, either about your tax debt or a potential scam.

4. Never Give Out Your Personal Information Through An Unverified, Unsecure Channel

As mentioned above, the IRS will never demand a certain payment method, make threats, or take payment details over the phone. If someone claiming to be the IRS tries any of these tactics, immediately hang up the phone or delete the email. A fraudster may have your contact information, but that doesn’t mean they should get your money, too.

Disclaimer: The above is solely intended for informational purposes and in no way constitutes legal advice or specific recommendations.