We know they are out there.
But because many more people have become aware of the telephone tax-payment trick and learned to ignore the threats, the schemers had to evolve.
And the latest twist on this swindle is just pure evil.
The IRS has issued a warning to taxpayers about a scam in which a fraudulently obtained tax refund is deposited into a victim’s actual bank account. Here’s how it works:
Cybercriminals steal people’s data from tax professionals, including routing and bank account numbers. The crooks file fraudulent tax returns. Fake refunds are then direct deposited into taxpayers’ real bank accounts.
In one version of this scam, the criminals then contact victims claiming to be from a debt-collection agency, and they say the refunds were deposited in error. They claim they are now trying to get the refund back for the IRS.
I can imagine how easy it is to panic and fall victim to this scam. Taxpayers can see money has been deposited. They know it isn’t rightfully theirs. And since nobody in their right mind wants to mess with the IRS, they are eager to cooperate to return the money.
“It’s insidious,” said Eric Smith, an IRS spokesman, who added that thousands of taxpayers have been affected by this scam.
In another version of this racket, a taxpayer gets a menacing recorded telephone message about the deposited refund. Someone claiming to be from the IRS threatens the person with arrest, criminal fraud charges and a warning that his or her Social Security number will be “blacklisted.” People are given a case number and then a telephone number to call to arrange the return of the refund, the IRS said.
Obviously, do not call back any number left by anyone claiming to work for the IRS or on the agency’s behalf. The IRS would not call you. It’s definitely the crooks calling.
“You need to return the money — just not to them,” Smith said.
In addition to having to figure out how to properly give back the refund to the IRS, you need to close your bank account and contact your tax preparer.
As for returning the fraudulent refund, you should go to irs.gov and search for “Topic Number: 161 — Returning an Erroneous Refund — Paper Check or Direct Deposit.” Then follow the steps.
If the fraudulent refund was direct deposited into your bank account, contact the “Automated Clearing House” (ACH) department of your financial institution. See if you can have the deposit returned directly to the IRS. You’ll also need to call the agency to explain why the refund is being returned. Individuals should call 800-829-1040. If you’re a business, call 800-829-4933.
If the erroneous refund came as a paper check, write “void” on the back where you would normally endorse it. You’ll have to send the check to the IRS location based on the city listed on the refund check. You should include a note explaining why you’re returning the refund. And, if I were you, I’d make a copy of the check and return it via certified mail just to be on the safe side.
Return the money as soon as you can. By law, interest may have accrued on the fraudulent refund, Smith said.
This is another reason why you shouldn’t procrastinate in filing your return. But if you do find that you’ve fallen for a tax scam, read the IRS’ “Taxpayer Guide to Identity Theft” at irs.gov.
One thing I did to protect myself was to sign up for an IRS online account. If you’re still putting together your tax return, as I am, it’s one way to monitor your tax records. Here’s the link to set up an account: https://www.irs.gov/individuals/online-services-account-activation.
You may not be able to immediately set up an account because of security measures. If you have a credit freeze on your Experian credit file, you’ll have to temporarily lift it. I had to wait for the agency to mail me an activation code to finish the process. But once your account is set up, you can see what return has been filed and get a payment history.
When it comes to your tax return, just be careful out there.