New tax scam

Following is a summary of Volunteer Tax Alert 2018-03 - "Information About a Tax Refund Scheme" - issued by the IRS. Click here to view the full document on the IRS website. Don't forget that Volunteer Tax Alerts are required to be available at all Tax-Aide sites in paper or electronic format.

Issue: The Internal Revenue Service is aware of a new scheme where criminals, after stealing client data from tax professionals, are filing fraudulent tax returns which include the taxpayers' real bank accounts for the refund deposits. The fraudulent refunds are deposited into the real taxpayers' accounts. The criminal subsequently contacts the taxpayers requesting/demanding the funds be returned and instructs the taxpayers how to return the funds. The taxpayers who follow these instructions are sending the money to the actual criminal and not the IRS.

Required Corrective Actions: Taxpayers should be alert to any unusual activity such as receiving a tax refund they did not request. Taxpayers who receive a direct deposit refund that they did not request (or did not file a tax return for) should take the following steps:

Contact the Automated Clearing House (ACH) department of the bank/financial institution where the direct deposit was received and ask the bank or financial institution to return the refund to the IRS.
Call the IRS toll-free at 800-829-1040 to explain why the direct deposit is being returned.