“Cyber criminals are always working to develop news schemes that will allow them to profit by stealing sensitive information from hard-working people,” Revenue Secretary Dan Hassell said. “This behavior is especially common early in the year when many taxpayers are preparing to file their tax returns. This is a good time for people to think about ways that they can protect themselves.”
Understanding the scam
The IRS recently issued a warning about the new scam. It starts when cyber criminals steal client data from tax professionals. The criminals are using that stolen data to file fraudulent tax returns in the name of identity theft victims.
Here’s the new twist: Rather than routing fraudulent tax refunds to a separate account, the criminals are directing the refunds to the taxpayers’ real bank accounts through direct deposit. They are using threatening phone calls to trick taxpayers into “returning” the refunds, but unsuspecting victims in some cases have forwarded the money to the criminals.
In one version of the scam reported by the IRS, a taxpayer who received a fraudulent refund also received an automated call with a recording from a person who claimed to be from the IRS. The recording threatened the taxpayer with criminal fraud charges, an arrest warrant and a “blacklisting” of their social security number. The recording gave the taxpayer a case number and a telephone number to call to return the refund.
In another version of the scam, criminals posing as debt collection agency officials acting on behalf of the IRS contacted taxpayers to say a refund was deposited in their accounts in error. The criminals asked taxpayers to forward the money to the collection agency.
Tips to avoid tax identity theft scams
The Department of Revenue and the IRS encourage taxpayers and tax professionals to be keep the following tips in mind to safeguard against this scam and others:
The Revenue Department and IRS will never call demanding immediate payment of past-due taxes. Do not give out personal information over the phone to unsolicited callers, even if the caller claims to be from the IRS or your bank.
Do not trust the number you see on your caller ID, even if it appears to be coming from the IRS. Scam artists increasingly use a technique known as spoofing to trick caller ID.
Make sure you are educated about phishing schemes, which involve fraudulent email messages that are designed to steal sensitive information, such as passwords, usernames or personal financial information.
Never take an email from a familiar source at face value. If an email asks you to open a link or attachment, or includes a threat to close your account, think twice. If you have any doubts at all, go directly to the legitimate website and access your account there.
Use strong, unique passwords. Use different passwords for each account. Use a mix of letters, numbers and special characters.
Use security software to help defend against malware, viruses and known phishing sites. Elect to automatically update the software.
If an email contains a link, hover your cursor over the link to see the web address (URL) destination. If it’s not a URL you recognize or if it’s an abbreviated URL, don’t open it.
Steps to follow if your identity was stolen
If a taxpayer receives an erroneous federal tax refund, the IRS encourages the taxpayer to visit this link for a step-by-step explanation on how to proceed.
If you are a victim of identity theft or discover a fraudulent Pennsylvania personal income tax return was filed using your identity, please contact the Department of Revenue’s Fraud Investigation Unit at 717-772-9297 or RA-RVPITFRAUD@pa.gov. The unit is dedicated to assisting victims of identity theft and combating tax refund fraud.