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Tax Time Tricks from Thieves

Mar 2, 2018 | Scam Alerts | 0 comments

LITTLE ROCK – With tax season in full swing, scammers are ramping up efforts to steal data from tax professionals and scam their clients. The Internal Revenue Service (IRS) recently issued an identity theft warning indicating that thieves hack into a tax professional’s files, steal sensitive client information and file a tax return in that person’s name. While the money may go to your personal account – reports indicate some amounts are as much as $20,000 – the scammer has plans to impersonate the IRS and collect that money later.

“This scam is heating up as more Arkansans file their taxes,” said Arkansas Attorney General Leslie Rutledge. “Scammers gain access to a tax preparer’s data and file fraudulent tax returns. The thieves then pose as the IRS and threaten legal action if the money is not turned over to them immediately, usually in the form of a wire transfer or pre-paid card.”

Some victims receive threats of being turned over to the IRS collection agency, while others have been told that their social security number would be “blacklisted.” These are both scams and the IRS asks consumers who receive an erroneous refund to follow the established procedures listed below.

Attorney General Rutledge and the IRS released the following tips if Arkansans find a large refund in their name that they were not expecting:

  • If the erroneous refund was a direct deposit:
    • Contact the Automated Clearing House 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 to explain why the direct deposit is being returned.
  • If the erroneous refund was a paper check and has not been cashed:
    • Write “Void” in the endorsement section on the back of the check.
    • Submit the check immediately to the local IRS location.
    • Do not staple, bend or paper clip the check.
    • Include a note stating, “Return of erroneous refund check because (provide a brief explanation of why the refund check is being returned).”
  • If 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 for the amount deposited by the scammers.
    • If you no longer have access to a copy of the deposited check, call the IRS toll-free at 800-829-1040 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 social security number.
    • Include a brief explanation of the reason for returning the refund.
    • Be aware that repaying an erroneous refund in this manner may result in interest due to the IRS.

The IRS has also encouraged tax preparers to increase their own security measures to avoid these data breaches. Tax preparers should consider consulting with a reputable data security consultant or provider in order to give greater protection to their customers.

The IRS encourages Arkansans with any questions about owed taxes to contact their office directly at (800) 829-1040.

For more information and tips to avoid scams and other consumer-related issues, contact the Arkansas Attorney General’s office at (800) 482-8982 or consumer@arkansasag.gov or visit ArkansasAG.gov or facebook.com/AGLeslieRutledge.

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