Did you check your bank account and discover a substantial amount deposited by the Internal Revenue Service (IRS), purportedly as an income tax refund? Did you actually expect such a large refund, if at all? If you answered “yes” to the first question and “no” to the second question, then don’t rejoice immediately.
You may be the next victim of a new tax scam if and when you act on it! You have to protect your interests without panicking because there are many things you can actually do. Here’s what you need to know.
Multiple Warnings Issued by the IRS
The IRS has issued several warnings about the new scam to all affected sectors, from the taxpayers to the tax preparers like H&R Block. On February 2, it urged tax professionals to strengthen their security particularly in preventing phishing emails, which can download malicious software used in stealing client data.
On February 13, the IRS warned taxpayers when reports surfaced about the expanding scope of the scam. The potential victims mushroomed from just a few hundred to thousands nationwide. The scammers were also increasingly targeting businesses, tax preparers and professionals, and human resource departments.
Modus Operandi Explained
The scam works on the anxiety, if not the fear, among taxpayers when the IRS comes calling. Let’s say a taxpayer – you, for example – discovers that there’s an IRS check in the mail or an IRS refund in your bank account.
You will then receive a call from the crooks pretending that they are representatives of a collection company in behalf of the IRS; the agency has supposedly deposited the refund to your account in error. The crooks will then demand that you transfer the money to another account, oftentimes threatening you with a criminal charges in case you don’t return it.
You may believe it because it does have a ring of truth to it, especially as there is an erroneous deposit to your account or a paper check in your mailbox. You may even return the fund because you’re afraid of court and jail time, especially when you’re being bullied.
Means of Protection for Taxpayers
But don’t be so quick in believing whoever is calling you! You should take the following steps to protect yourself:
- Neither withdraw nor spend the erroneous deposit or check.
- Ask the IRS whether the call was legitimate or not. Call 1-800-908-4490, the contact number for the IRS identity theft unit.
- In case of a direct deposit, contact your bank’s automated clearinghouse unit so that the funds can be returned to the IRS. Be sure to notify and explain to the IRS your reason for return, as well as file a formal complaint with the Federal Trade Commission and notify your tax preparer about your actions.
You should also check with your tax preparer about its security measures, especially the use of encrypted emails, so that you don’t have to deal with scams like this one.