Beware: The Latest Tax Refund Scam

Mar 20, 2018 | Blog

You should definitely exercise caution and assume it might well be a scam if you receive an unexpected refund check for your taxes from the IRS, or you notice a deposit has been made in your bank account.

This latest scam works by having the fake refund deposited into a real bank account, after first stealing the financial and personal information of taxpayers to file taxes. The IRS released a statement in the middle of February, warning taxpayers of this latest scam.

Keeping alert is important to avoid being taken in by this scam, as the way in which it is carried out is always changing. At the moment, the scammers contact the unsuspecting taxpayer and pretend to be debt collectors. They point out that the deposit has been made to their account by mistake and a collection agency is seeking repayment of the incorrect amount.

Other versions of this scam reported by taxpayers advise that the taxpayer will be threatened with arrest and charged with fraud unless they pay back the amount they received. Victims are given a phone number and a case number in order to repay the money.

Of course, you really will need to return the money to the IRS if you have a deposit in your bank account that you aren’t entitled to, supposedly for last years taxes. You don’t want to incur the wrath of the IRS or the risk of penalties for not paying it back, making it important to follow these steps.

Returning a Bogus Refund To the IRS

If you received the bogus tax refund deposit by direct deposit, your bank’s ACH, or automated clearing house will need to return the money to the IRS. You should also call the IRS and let them know you have a fake refund amount and are returning it. Businesses should call 800-829-4933, while an individual taxpayer should call 800-829-1040.

You should return any uncashed check to the IRS as soon as possible, if your fake refund was received in the form of a check. You should include a note explaining why you are returning the check, write ‘void’ on the back of the check, avoid bending or stapling the check, and make sure you send it to the appropriate location, as indicated below.

You will need to mail the IRS a personal check or a money order for the amount of the fake refund if you already cashed the check. You should also call the IRS at the same numbers listed above to let them know you are returning the check, and why. You will need to put some key information on the back of the check or money order to make sure it is processed efficiently and as quickly as possible – your taxpayer ID or social security number, the applicable tax year that you are receiving a refund on your taxes, and the words ‘payment of erroneous refund.’ However, you may incur additional interest if you have cashed the check and then pay the IRS by another method.