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New Tax Scams Are On The Rise – Protect Yourself And Your Tax Return

They say the only things certain in life are death and taxes, and, well, tax scams. The Internal Revenue Services (IRS) just reported yet another disturbing trend of targeting tax preparers this tax season. This year, however, the schemes seem a bit more sophisticated, making you a bit more susceptible.

Even though this year’s tax season has just begun, the IRS says it is already seeing red flags that cybercriminals are trying to file fraudulent returns with information stolen from tax preparers’ computers.

The reason this tax scam seems more dangerous than in years past, though, is because it isn’t raising the same red flags the IRS has learned to look for in previous tax seasons. These fake returns use the real names and Social Security numbers of real taxpayers. The scam even deposits the funds into their real actual bank accounts.

So, these scammers are just filing my taxes for me?

Um, no. Not quite. Keep reading.

How does it work?

It begins when a scammer siphons your information after realizing you are due for a refund — this information has been stolen directly from your tax preparer. The scammer then completes the tax return on their own and files it before your tax preparer gets around to doing it (imagine how busy a tax preparer is at this time, it can take weeks).

Your refund is then deposited into your bank account. All of this is unbeknownst to you.

Now, that all seems relatively harmless, right? Until a woman posing as a debt collector gives you a call. She tells you that a refund was mistakenly deposited into your bank account, and asks that you forward the money her way to avoid debt collection tactics, and that she’s really sorry for the inconvenience.

Most people would comply here, why wouldn’t you? Unfortunately for you, when you comply, there is no way of retrieving that money because it was your actual tax refund, legally paid by the IRS, that you then gave to a scammer.

Due to these practices, the IRS has begun urging tax preparing professionals to increase their personal security as this scam is really only possible if a hacker was to penetrate said tax professional’s computer system. This can happen through many ways, but most likely through an email phishing scam.

Targeting tax professionals

It was reported as early as October that scammers had breached cloud databases, stealing steal information from financial services clients. When impersonating a tax professional’s organization, the scammers contacted clients asking them to update their personal tax information. As the IRS is now seeing, that information can be used to file a tax return with ease.

“This scheme is likely just the first of many that will be identified this year as the IRS, state tax agencies, and tax industry continue to fight back against tax-related identity thieves,” the IRS warned in a statement.

It was also reported by the IRS that efforts to prevent taxpayer identity theft have been so effective in recent years scammers have simply evolved their tactics to focus on tax professionals, where they can steal client data.

We urge consumers to beware of that aforementioned “debt collector” calling to say that money was deposited by mistake and asking that it be sent to them. If you get such a call, hang up and contact the IRS to let them know, then tell your tax preparer. Though this means your tax return has already been filed with the IRS and the refund was issued, since the scammer filled out the return, it might not have been done correctly.

Have you heard of any Tax Scams circulating this tax season? Please let us know so we can find them all. We’d love to hear from you! Consider The Consumer can be reached via Email at, found on Twitter or Facebook, or you may even connect with us directly on our website!

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