The IRS reported successfully blocking over 900,000 fraudulently filed tax refunds from being distributed last year, which would have totaled $6.5 billion being paid to scammers. But, over 1.5 million possible fraudulent tax returns were processed and have paid out an estimated $5.2 billion in tax refunds.
The thieves will use the same address to file multiple fake returns, which can total hundreds or thousands of returns coming from this same location.
So how are scammers able to gather information?
- They are able to gather information for real taxpayers that are either on a public assistance program or deceased and file a phony return for them.
- There is a common practice of sending out emails claiming to be from the IRS and telling taxpayers they are due a refund and request personal information from them to steal the victim’s identity.
- The “advanced fee” scam claims to come from the Treasury Department to tell people they’ll receive lottery winnings. They follow up via email and phone, making the scam sound believable and lastly tell the victim to pay the taxes due in advance of receiving the winnings. Once the victim pays the claimed taxes, they do not receive their millions in winnings.
How can you be sure it’s a scam?
- If they request detailed or an unusual amount of personal information, SSN, bank or credit card account numbers or security-related information, such as mother’s maiden name, either in the e-mail itself or on another site to which a link in the e-mail sends the victim.
- If they mention a tax refund or offer to pay you to participate in an IRS survey. Or they threaten a consequence for not responding to the e-mail, such as additional taxes or blocking access to your own funds.
- If they get federal agency names wrong. Or use incorrect grammar or odd phrasing because many of the e-mail scams come from overseas and are written by non-native English speakers.
- If they use a really long address in any link contained in the e-mail message or one that does not start with the actual IRS Web site address (http://www.irs.gov). You can check this by moving the mouse over the link included in the text of the e-mail.
How do you know if you are a victim?
If you receive a real letter from the IRS and it states any of the following notices, you may have been an identity theft victim:
- More than one tax return for you was filed for you in a certain year
- You have a balance due, refund offset or have had collection actions taken against you for a year you did not file a tax return, or
- IRS records indicate you received wages from an employer unknown to you.
If you become a victim of identity theft, you should report it to the IRS right away. You can forward suspicious emails to email@example.com and visit the US Federal Trade Commission’s website for identity theft at www.OnGuardOnline.gov for more advice. Be sure to pay attention to whom sends you emails to keep yourself safe from identity theft next tax season!