2018 Tax Season Brings New IRS Scam; Beware of Tax Refund Direct Deposits You Didn’t Request

If you receive a direct deposit tax refund in your account that you didn’t request, there’s a chance your tax preparer might have been hacked.

Indeed, there’s new IRS scam that’s started cropping up this season. As detailed in this Krebs on Security blog post, identity thieves have hacked online accounts at multiple tax preparation firms. Phishing scams very well could be to blame. The scammers used the hacked information to request a phony tax refund from the IRS and once the money lands in the unsuspecting client’s bank account, the scammers immediately contact them, posing as collection agency officials. They say the refund was an error and demand the person “return” the money to an ACH routing and wire number that most certainly does not belong to the IRS. The crooks are so bold as to give people a “Transaction Error Correction Letter” on official-looking IRS letterhead that threatens: “You have to make this transaction no later than 24 hours after receiving this letter” and “Failure to Comply Law and Regulations IRS is suppressed in accordance with publication: How Criminal Investigations are Initiated” — whatever that means.

The IRS is aware of the scam and issued a warning to tax preparers on Feb. 2, 2018, to step up security and to watch out for phishing scams. The warning reads, in part: “In a new twist, the fraudulent returns in a few cases used the taxpayers’ real bank accounts for the deposit. A woman posing as a debt collection agency official then contacted the taxpayers to say a refund was deposited in error and asked the taxpayers to forward the money to her.”

The release reminds tax professionals how to report data thefts to the IRS and reminds them that time is of the essence: “when notified immediately, the IRS can take steps to help protect taxpayers from tax-related identity theft.”

If you do receive a direct deposit you didn’t request, here’s what you need to do:

  1. 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.
  2. Call the IRS toll-free at 800-829-1040 (individual) or 800-829-4933 (business) to explain why the direct deposit is being returned.
  3. Keep in mind interest may accrue on the erroneous refund.

Here are more blog posts in our series regarding tax-related identity theft:

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