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Tax refund scams are back

TaxScamAlert2018.jpg

Income tax scams are nothing new, but the latest one has a new twist and includes multiple phases1:

  1. A criminal steals taxpayer information, usually by tricking a tax preparer into clicking a phishing link that installs malware that gathers data2.
  2. Here’s the tricky part: you get an actual refund. Using the taxpayer’s (i.e., victim’s) real data, the criminal files a tax return – the refund is either mailed as a paper check to the taxpayer’s address or electronically deposited into the taxpayer’s real bank account.
  3. The victim receives a call (either an automated recording or a live person) claiming to be from the IRS or a debt collection agency working for the IRS.  The victim is told that the refund was made in error and needs to be returned, per instructions given over the phone. The victim thinks the money is being sent back to the IRS, but it’s actually going to a scammer.

Here’s how to avoid becoming a victim of this scam:

  • Filing early is the most important step to avoid becoming the victim of any tax scam, according to this Tax Time Tip Sheet from the National Cybersecurity Alliance and the Identity Theft Resource Center. Since the IRS accepts one tax return for each Social Security Number, you would ideally file yours before a criminal has the chance to submit a return with your information.
  • Never follow instructions provided over the phone or via email, even if the person claims to be from the IRS.  If you receive a refund but haven’t filed taxes yet, then follow the IRS’ online instructions for how to return an erroneous refund – paper check or direct deposit.
  • Call the IRS directly at 1-800-829-1040 if you have questions about your tax refund or believe you’ve been the victim of a scam.

For details on other types of tax scams and how to identify/avoid them, see the three-part series we ran last year:
Tax Scams, Part 1: Vishing (Voice Phishing) for Personal Info or Money

Tax Scams, Part 2: Phishy Tales from the IRS

Tax Scams, Part 3: Enter the New Villain…Snail Mail

Additional Resources

Identity Theft Resource Center

Identity Protection: Prevention, Detection and Victim Assistance (IRS.gov)

How to know it’s really the IRS calling or knocking on your door (IRS.gov)

References

  1. IRS Issues Urgent Warning On New Tax Refund Scam – And It’s Not What You’d Expect (Forbes)
  2. Scam Alert: IRS Urges Taxpayers to Watch Out for Erroneous Refunds; Beware of Fake Calls to Return Money to a Collection Agency (IRS.gov)


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