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Britt Erica Tunick is an award winning financial journalist who has spent the past 17 years writing about virtually every aspect of finance. She has mastered the art of boiling down complicated financial topics for readers to understand.

Heads Up on the Latest Tax-Related Form of Fraud

Heads Up on the Latest Tax-Related Form of Fraud

By Britt Erica Tunick

Once again, it is time to start thinking about tax returns. Whether you have already filed your taxes or are still in the process of gathering documentation for an accountant, the calendar is rapidly forging ahead to April 15th (technically April 17th, as that is the day that 2017 returns are due). Unfortunately, that means there is yet another tax-related scam you should be aware of as well.

The Internal Revenue Service has been reaching out to banks to inform them of a new variation on the tax-return scams that have made the rounds in past years. Needless to say, this is something everyone should be aware of.

Tax scams are nothing new. For years, criminals have impersonated IRS employees, both through e-mails and phone calls, to try and con individuals into handing over sensitive information such as social security numbers, or to get them to wire money to avoid being arrested for “overdue” payments. But it seems that criminals are getting more sophisticated.

This time around, criminals are taking advantage of access to people’s social security numbers –whether obtained through data breaches, hacking or even through phishing emails sent to accountants to obtain information about their clients– and are using that information to file false returns using individuals’ own bank accounts.

Once the phony returns are paid into an individual’s bank account, criminals then reach out to these people, impersonating IRS employees or law enforcement officers, saying that a mistake has been made and that the money should be returned to them so that an accurate return can be made in its place.

In recent years, the tax return money was sent to the criminals’ bank account. But this is new this year -and is why the IRS is warning people about it and why they are having a hard time detecting it themselves. Since people expect the former version, this new form isn't on their radar.

Because this fraud involves real social security numbers and accurate information about individuals’ true tax situations (i.e. income levels, dependents, etc.), it is extremely difficult for the IRS to pick up on such fake returns. When it comes to the individuals being conned out of their money, such tactics are incredibly believable when a criminal’s claims that an errant return has been paid out are backed up by deposits for the exact amount they are being told about into their bank account.

Once again, it is important to remember that the IRS will never contact you by phone or e-mail. If you are contacted by someone regarding claims of a mistake with your tax return, do not transfer or wire any money to these individuals. Instead, if someone contacts you regarding an error with your tax return, call the IRS yourself to find out if there is an issue with your return. Following are numbers to reach the IRS at: (800) 829-1040 for individuals or (800) 829-4933 for businesses. If you received a false refund and weren’t actually due one, call the IRS as soon as possible and arrange to repay that money so that you don’t find yourself on the hook for penalty fees.


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