The Internal Revenue Service is warning U.S. consumers of a new tax refund scam that’s going around right now. Apparently, hackers are breaking into tax preparers’ client files and stealing data. Then they file a fraudulent tax return in the victims’ names, using their real bank account to get a refund. Finally, they use various methods to get the cash from their victims. According to the IRS, there’s more than one version of this tax refund scam being used right now.
The IRS issued a warning about the tax refund scam this week as a follow-up to a Security Summit alert that was issued earlier this month. The agency now says that it has discovered that even more tax preparers’ files have been breached, and the number of taxpayers who may have fallen victim has jumped from hundreds up to several thousand in a matter of days.
One of the ways the scammers are getting the funds they had fraudulently deposited into victims’ bank accounts is by posing as a debt collector that’s acting for the IRS. They basically tell the victims that the tax refund was mistakenly deposited and then tell them to send the cash in.
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A different version of this tax refund scam involves an automated call from a recorded voice. The person claims to be from the IRS and then threatens to file charges of criminal fraud against them. He also threatens to get an arrest warrant and to “blacklist” their Social Security Number. The recording gives a case number and also a phone number they can supposedly call to give back the funds.
The IRS is now urging taxpayers to ignore such phone calls, and it has outlined the correct procedures to return a refund that was deposited erroneously in Tax Topic Number 161 on its website. Additionally, those who fall victim to this tax refund scam are urged to contact their banks and possibly close the account any funds were deposited into and to get in touch with their tax preparers right away.
The agency also warns that some taxpayers who file their returns electronically may discover that their return is rejected because there’s already one with their social security number on file. Victims are told to follow the procedures in the IRS’ Taxpayer Guide to Identity Theft. Victims who do not file electronically should include an Identity Theft Affidavit, which is form 14039, with their paper return, saying that their identity was stolen due to a breach of their tax preparer’s records.