TDCI Warns Consumers About New Twist on Tax Refund Scam

Thursday, February 22, 2018 | 12:35pm

NASHVILLE – With tax filing season underway, the Tennessee Department of Commerce & Insurance’s (TDCI) Division of Consumer Affairs is sharing a warning from the Internal Revenue Service (IRS) that cautions consumers about a new scam tactic involving erroneous tax refund deposits.

According to the IRS, the scam began with cybercriminals employing malware to mine client data from tax professionals’ computers. The criminals use the stolen data to file fraudulent tax returns, listing the taxpayers' real bank accounts for the deposit. Thieves then utilize various, ever-evolving tactics to reclaim the refund from the taxpayers.

In one version of the scam, criminals pose as debt collection agency officials acting on behalf of the IRS. They contact the taxpayers to say a refund was deposited in error, and they ask 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 urges taxpayers who are affected by this scam to follow these established official procedures for returning an erroneous refund to the agency. The IRS also encourages taxpayers to discuss the issue with their financial institutions because there may be a need to close bank accounts. Taxpayers receiving erroneous refunds also should contact their tax preparers immediately.

TDCI reminds consumers that the IRS will never:

  • Ask for credit or debit card numbers over the phone or email. 
  • Call or email you to verify your identity by asking for personal and financial information.                                                                
  • Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. Generally, the IRS will first mail you a bill if you owe any taxes.
  • Threaten to immediately bring in local police or other law-enforcement groups to have you arrested for not paying. 
  • Demand payment without giving you the opportunity to question or appeal the amount they say you owe.   

Consumers can find more detailed information about this and other tax refund scams, by visiting the IRS website.

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