The Internal Revenue Service (IRS) issued a warning to taxpayers this week to beware of “erroneous refunds.”
According to the agency, there is an emerging scam where refunds are wrongly being deposited into taxpayers’ accounts. Thieves use victims’ real information to file a fake return, have the refund deposited into the taxpayers’ real bank accounts and then use various tactics to steal the cash.
The number of victims has jumped from “a few hundred to several thousand in just days,” according to the agency.
The increase in activity comes shortly after the IRS discovered that a larger number of client data was stolen from tax professionals’ computer files.
How to detect the scam
There are two versions of the scam thieves are using to collect the fraudulent refund from taxpayers. One involves criminals calling taxpayers acting as IRS-sanctioned debt collection agency officials to tell them the refund was mistakenly deposited and asking them to forward the money to their “collection agency.”
The other features an automated call saying the taxpayer is in danger of being charged with criminal fraud unless she returns the refund.
You are at risk of fraud if, when you file, you receive a bounce back notification from the IRS that your Social Security number is already associated with a return. This indicates someone else has filed using your information.
What to do
The IRS is advising taxpayers to follow its established protocol for returning erroneous refunds instead of taking any other instruction. The agency says individuals should also contact their tax professionals and financial institutions, because bank accounts could be impacted.