IRS warning of new scam involving fake refunds - WFMJ.com News weather sports for Youngstown-Warren Ohio

IRS warning of new scam involving fake refunds

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The Internal Revenue Service is once again warning taxpayers of a new twist on an old scam. 

Its no new feat for a scammer to call, claiming to be from the IRS and asking for immediate payment. 

But according to the IRS, there's now a new twist- just in time for tax season- and hundreds of thousands have already fallen prey to scammers. 

The Internal Revenue Service says the new version of the scam involves hackers gaining information straight from tax professionals and then filing fraudulent tax returns. 

One of the more unique aspects of the scam, according to the IRS is that these criminals then use the taxpayers' real bank accounts for the deposit.

Once the money is deposited, the thieves allegedly use several different techniques to try to reclaim the money. 

The IRS says the techniques are always evolving, but as of right now the most documented cases point to two main strategies. 

In one version of the scam, criminals posing as debt collection agency officials acting on behalf of the IRS contacted the taxpayers to say a refund was deposited in error, and they asked the taxpayers to forward the money to their collection agency.

In another version, the taxpayer who received the erroneous refund gets an automated call with a recorded voice saying he is from the IRS and threatens the taxpayer with criminal fraud charges, an arrest warrant and a "blacklisting" of their Social Security Number. The recorded voice gives the taxpayer a case number and a telephone number to call to return the refund.

The IRS's website repeats that it is increasingly important for taxpayers to realize that the IRS will never initiate communication by calling taxpayers, emailing them, or contacting them via social media. 

The IRS says last week it called for all tax professionals to increase their cybersecurity in order to protect taxpayers' sensitive information. 

If you find yourself the victim of the scam, the IRS says you will know when either a deposit is entered into your bank account without having filed taxes, or taxpayers who file electronically may find that their tax return will reject because a return bearing their Social Security number is already on file.

If that's the case, taxpayers should follow the steps outlined in the Taxpayer Guide to Identity Theft. Taxpayers unable to file electronically should mail a paper tax return along with Form 14039, Identity Theft Affidavit, stating they were victims of a tax preparer data breach.

Here are the official ways to return an erroneous refund to the IRS, according to their website. 

Taxpayers who receive the refunds should follow the steps outlined by Tax Topic Number 161 - Returning an Erroneous Refund. The tax topic contains full details, including mailing addresses should there be a need to return paper checks. By law, interest may accrue on erroneous refunds.

If the erroneous refund was a direct deposit:

  • Contact the Automated Clearing House (ACH) department of the bank/financial institution where the direct deposit was received and have them return the refund to the IRS.
  • Call the IRS toll-free at 800-829-1040 (individual) or 800-829-4933 (business) to explain why the direct deposit is being returned

If the erroneous refund was a paper check and hasn't been cashed:

  • Write "Void" in the endorsement section on the back of the check.
  • Submit the check immediately to the appropriate IRS location listed below. The location is based on the city (possibly abbreviated) on the bottom text line in front of the words TAX REFUND on your refund check.
  • Don't staple, bend, or paper clip the check.
  • Include a note stating, "Return of erroneous refund check because (and give a brief explanation of the reason for returning the refund check)."


The erroneous refund was a paper check and you have cashed it:

  • Submit a personal check, money order, etc., immediately to the appropriate IRS location listed below.
  • If you no longer have access to a copy of the check, call the IRS toll-free at 800-829-1040 (individual) or 800-829-4933 (business) (see telephone and local assistance for hours of operation) and explain to the IRS assistor that you need information to repay a cashed refund check.
  • Write on the check/money order: Payment of Erroneous Refund, the tax period for which the refund was issued, and your taxpayer identification number (social security number, employer identification number, or individual taxpayer identification number).
  • Include a brief explanation of the reason for returning the refund.

Repaying an erroneous refund in this manner may result in interest due to the IRS.

For more information on necessary forms and what to do if you notice an odd refund, or are unable to file your taxes due to a fraudulent filing, visit the IRS website: Scam Alert: IRS Urges Taxpayers to Watch Out for Erroneous Refunds; Beware of Fake Calls to Return Money to a Collection Agency

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