When Tuesday’s April 17 tax deadline passes, you and millions of others may breathe a large sigh of relief. There’s nothing to do now but sit back and wait on a refund! But the IRS is warning about a new and fast-growing scam where unsuspecting victims receive a check from the IRS.
This is a new twist on an old scheme. Using the old way, criminals simply filed bogus tax returns and received refund checks. But the IRS made that more difficult, improving fraud screening and identification procedures. Now thieves must use more credible data to ensure their success.
The new scheme works this way: Thieves harvest people’s personal data, including Social Security and bank account numbers, addresses and phone numbers through data breaches, hacking professional tax preparers’ computer networks, bogus online tax preparation sites or other data mining schemes. They employ this real data to deposit fraudulent tax refunds from the IRS directly into taxpayers’ real bank accounts.
The criminals then collect the erroneously deposited money in a couple of different ways: In one version, they pose as IRS or other law-enforcement officials, informing the taxpayer of the erroneous deposit and demand the money be returned using money loaded on gift cards or by wire transfer. Criminals have also claimed to be debt collection agencies working on behalf of the IRS. They instruct the taxpayer to repay the money directly to the bogus collection agency.
Recorded robocalls are another tactic scammers use. The voice, claiming to be from the IRS, attempts to bully victims, telling them an arrest warrant will be issued, they will be charged with criminal fraud and their Social Security number “blacklisted.”
The ironic thing is an actual deposit from the IRS has appeared in the taxpayer’s bank account, so people are less likely to question the caller’s validity when contacted.
Don’t send the money! Unfortunately, once that money has been sent to the scammer, the taxpayer is still on the line to the IRS.
Remember, the IRS does not:
• Make telephone calls or send emails demanding payment as its first form of contact.
• Will not threaten you with tax fraud or issue a warrant for your arrest.
• Demand you pay any funds using a specific payment method such as a prepaid debit card, gift card or wire transfer. Generally, the IRS will first mail a bill to any taxpayer who owes taxes.
• Demand that you pay taxes without the opportunity to question or appeal the amount they say you owe.
What should you do if you receive a refund you shouldn’t have? Don’t spend that money! The IRS says taxpayers who receive an erroneous refund should contact the Automatic Clearing House department of their bank. The bank would return the erroneous refund directly to the IRS.
If, by chance, you need to return an uncashed refund check, write void on the back where you would sign it. Submit the check immediately (no later than 21 days) to the appropriate IRS location listed online at www.irs.gov/taxtopics/tc161. Include a note saying you’re returning an erroneous refund check and give a short reason. If you don’t act promptly to repay the erroneous refund, the IRS could charge interest on the money.
Taxpayers should also contact the IRS. Individual tax filers call 800-829-1040, or call 800–289–4933 for businesses. You also should file an Identity Theft Affidavit Form 14039 to state that you were a victim of a tax preparer data breach.
As you can see, cybercriminals are always developing new lines of attack, so if this situation hits you, it’s important that you take action.
Cheryl Parson is president of the Better Business bureau serving West Central Ohio. The BBB may be found on the Internet at www.lima.bbb.org.