The Internal Revenue Service is warning taxpayers to be aware of fast growing tax refund scam.
In a Feb. 26 press release, the agency says several thousand taxpayers have been victims of the scam, in which criminals who have stolen taxpayers information from tax professionals, file fraudulent tax returns in their names, use their real bank accounts for the tax refund, then use various tactics to reclaim the refund from them.
In one version of the scam, criminals pose as debt collection agency officials acting on behalf of the IRS, contacts the taxpayers to say a refund was deposited in error, and 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.
Because this is a peak season for filing tax returns, the IRS said that taxpayers who file electronically may find that their tax return will be rejected if it bears a Social Security number that is already on file.
Here are the IRS step-by-step procedures to return erroneous funds to the agency and to avoid being scammed:
If the erroneous refund was a direct deposit:
nContact 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.
nCall 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:
nWrite "Void" in the endorsement section on the back of the check.
- nIn Atlanta, submit the check immediately to ATLANTA – Internal Revenue Service, 4800 Buford Highway, Chamblee GA 30341
nDon't staple, bend, or paper clip the check.
nInclude a note stating, "Return of erroneous refund check because (and give a brief explanation of the reason for returning the refund check)."
If the erroneous refund was a paper check and you have cashed it:
nSubmit a personal check, money order to the Atlanta Office.
nIf 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.
nWrite 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).
nInclude a brief explanation of the reason for returning the refund.
nRepaying an erroneous refund in this manner may result in interest due the IRS
For more information, visit: the Taxpayer Guide to Identity Theft, and Tax Topic Number 161 - Returning an Erroneous Refund.