The IRS has reported that the number of potential victims impacted by a tax scam has increased from a few hundred to several thousand in just a few days. Putting a new twist on an old scam, criminals are taking taxpayer information, filing fraudulent returns, and depositing erroneous refunds into real taxpayers’ bank accounts. The criminals then contact the victim and use a variety of tactics to attempt to claim the refund.
The scam appears to have originated from tax preparers’ offices, where computers that have been infected with malware provided criminals with access to thousands of consumers’ return data.
“Speed is critical,” the agency said in its advisory. “If reported quickly, the IRS can take steps to block fraudulent returns in a preparer’s clients’ names.”
As tax preparers increase their security settings to protect client tax and financial files, it is important that consumers also protect themselves by knowing identity theft warning signs.
Top Indicators of Tax-Related Identity Theft
- More than one tax return was filed using your Social Security Number
- IRS records indicate you received wages from an establishment at which you never worked
- You owe additional tax, receive a refund offset notice, or have had collection actions taken against you for a year you did not file a tax return
If you become a victim and notice an erroneous deposit in your account, take the following steps:
- Contact your tax preparer immediately.
- Contact the Automated Clearing House (ACH) department of the bank/financial institution where the direct deposit was received and have them return the refund to the IRS.
- Call the IRS toll-free at 800-829-1040 (individual) or 800-829-4933 (business) to explain why the direct deposit is being returned.
- Be aware that interest may accrue on the erroneous refund.
- Communicate with your financial institution and be prepared to close your account, since the information has been accessed by criminals.
You can also access the steps for returning your erroneous refund directly on the IRS website.
Remember: The IRS does not initiate contact with taxpayers by email, text, or social media, or phone calls to discuss your account. If you receive a message, be suspicious!
LBA Haynes Strand is dedicated to alerting the public on any scam or fraudulous attempt to steal identities or gain access to important financial information. If you are interested in automatically receiving updates such as this, please subscribe to our blog.