Planning matters

Unexpected Tax Refund in Your Bank Account? It Could be a Scam.

Every tax season seems to bring a new tax scam.

By now, we know that the IRS doesn’t initiate contact with taxpayers via telephone or email. We’re careful with emails, we don’t click links or download attachments, and we delete suspicious emails. We try to protect ourselves from identity theft. We know what phishing is. We use strong passwords and change them often.

Recently, the IRS has reported a new scam. Cybercriminals are using stolen taxpayer data to file tax returns and have the resulting refunds direct-deposited into the taxpayers’ real bank accounts.

Why would cybercriminals use real taxpayer data?

It’s much harder for the IRS systems to detect fraudulent tax returns that use real taxpayer data. Once the refund is direct-deposited, the criminals, posing as IRS-affiliated debt collection agents, contact the victim, tell them the refund was deposited in error, and demand that the funds be forwarded to them.

Taxpayers have also reported receiving automated calls from IRS “representatives” who leave a case number and telephone number to call to learn how to return the “erroneous” refund.

What should you do if you receive an unexpected refund?

  • Don’t spend it! The IRS will charge interest if you have to repay the refund via check.
  • Ask your bank to return the direct deposit to the IRS.
  • Void and mail erroneous refund checks to the IRS. Include a note stating the reason for returning the check.

Official IRS guidance for returning a refund can be found at the IRS website: Topic Number: 161 – Returning an Erroneous Refund – Paper Check or Direct Deposit

Read the IRS News Release about this scam here.

Written By Johnson Bixby