Scammers are conning people out of their entire tax refunds.

Inside Subprime: February 28, 2018

By Caroline Thompson

Tax season is may be miserable, but nearly 80 percent of Americans are rewarded for all their pain and suffering when that sweet, sweet tax refund check comes in the mail. This year, however, an uptick in tax scams could mean that many people who are expecting, even relying, on their anticipated refunds may find themselves with nothing.

The IRS has released a statement warning consumers about a sharp increase fake IRS phone calls from scammers trying to steal refunds.

“This scam has hit taxpayers in nearly every state in the country. We want to educate taxpayers so they can help protect themselves. Rest assured, we do not and will not ask for credit card numbers over the phone, nor request a pre-paid debit card or wire transfer,” said IRS Acting Commissioner Danny Werfel. “If someone unexpectedly calls claiming to be from the IRS and threatens police arrest, deportation or license revocation if you don’t pay immediately, that is a sign that it really isn’t the IRS calling.”

While scammers have been doing this kind of thing for years, Americans are especially vulnerable this tax season, after the recent rash of data breaches from major companies like credit reporting giant Equifax. With the information contained in the Equifax breach, hackers can assume your identity in a snap.

“The hackers take that and file a fraudulent return on your behalf and wind up stealing your tax refund,” Darren Guccione, an employee of the cyber-security firm Keeper, told ABC 7 Chicago.

Even if these tax season con artists don’t already have your information from the Equifax hack, Guccione said there are other ways they could gain access to your sensitive data. Look out for emails claiming to be from the IRS, or from people that you know and trust. Recently, an email spoof which claimed to be from an administrator for the Illinois Village of Batvia put village employees’ W-2s in the hands of a scammer, leaving them all at risk of tax fraud in 2018.

(Check out our Illinois state page to more about the subprime marketplace in Illinois)

“It’s a huge problem now because now that organization has those W-2 forms, they can go and fill out a 1040 easy, file the tax return, claim the refund, and they are off to the bank, off to the next victim. That is the problem we are seeing far more prevalent and way more pervasive. W-2 forms, 1099s, other tax information including tax transcripts, the amount of information hackers are receiving has greatly increased and as a result it is advisable to file returns as quickly as possible,” Guccione said.

If a scammer files your taxes before you do, not only will you be out a refund, but you’ll also have to deal with the ramifications of the tax fraud they likely committed to maximize their payout.

Additionally, The New York Times recently reported on a new kind of tax scam, in which scammers use your bank account to store a fraudulent refund from someone else in the hopes that you’ll wire it to them when they call and explain their “mistake.”

Per the Times:

“The crooks, for example, will call victims and pretend they’re a collection company for the I.R.S., which has deposited the funds in error. They then demand that victims transfer the money to a different account. ‘They say, ‘We made a mistake; send it back to us,’’ Mr. Lemons said.

Or, they will leave voice messages threatening the taxpayer with criminal fraud charges or an arrest warrant if they don’t call the number provided to return the ‘refund.'”

“Taxpayers need to watch out for identity theft especially around tax time,” wrote the IRS in its annual “Dirty Dozen” list of common tax scams. “The IRS continues to aggressively pursue the criminals that file fraudulent returns using someone else’s Social Security number. Though the agency is making progress on this front, taxpayers still need to be extremely cautious and do everything they can to avoid being victimized.”

For more information about tax fraud, hacking and predatory lenders out these related pages and articles from OppLoans:


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