IRS warns of new scam around wrong tax refund deposits
14 Feb 2018
The US' Internal Revenue Service (IRS) has warned about a new scam involving the deposit of erroneous tax refunds into real taxpayer bank accounts.
According to the IRS, the fraudsters then use different tricks to con taxpayers into turning over the funds. According to commentators, it is an old scam given a new twist.
Phishing and other schemes are being used to steal client data from tax professionals, which is then used to file fraudulent tax returns with the taxpayers' real bank accounts being used to deposit erroneous tax refunds.
Finally, the thieves, posing as IRS or other law enforcement personnel, call attention to the error and demand the return of the money from taxpayers.
The modus operandi assures a degree of safety to them given that it is more difficult to identify and halt fraudulent tax returns when they are using real client data such as income, dependents, credits, and deductions.
Also it is harder to track when criminals can find alternative ways to get the fraudulent refunds delivered to themselves rather than the real taxpayers.
The fraudsters use various tactics to get the funds from real taxpayers. In one version, the criminals impersonate debt collection agency officials acting on behalf of the IRS. They contact taxpayers to say a refund was deposited in error, and ask them to forward the money to their collection agency.
Meanwhile, the IRS said it has already received a number of fake tax returns with accurate taxpayer names, addresses, Social Security numbers and even bank account information for the victims.
According to the IRS, it is still in preliminary stages of investigating the con and is not in a position to give the actual number of the people affected. In view of rapid pace as which such scams can spread, the agency wanted to immediately warn preparers to secure their computer systems.
"Given the history that we have seen on scams like this, when these start, they tend to proliferate quickly," said IRS spokesman Terry Lemons, CBS reported. "When a scam turns out to be successful, they tend to expand. We wanted to alert tax professionals to be on the lookout."
