During the tax filing season, millions of dollars in refund money will be paid out to taxpayers. Unfortunately, not all of that money will find its way into the right pockets.
Each year, a variety of refund scams surface. With the onset of online identity theft and cyber crimes, swindlers are becoming increasingly faceless. Here are some tips so that you do not fall victim to a refund scheme.
In general, the IRS does not make use of email to communicate with taxpayers. If your account has been assigned to a field representative, such as a Revenue Officer or Agent, he or she may ask you for your email address. However, the IRS does not use email to make unsolicited requests.
If you ever receive an email that indicates it originated from the IRS, especially one that requests personal identifying information such as your Social Security Number, or financial information such as your banking information or pin number, do not open the email and certainly do not respond to it.
Forward the email to firstname.lastname@example.org. Many of these fake emails use IRS logos or other trademarked material in order to make them appear valid. The email could link you to a “mirrored” IRS site which may contain Trojan viruses, keystroke logs, maleware or other harmful material. After forwarding the email, the IRS will advise you if the email is a scam, and will take the appropriate action to follow up on the source.
The same holds true for Twitter accounts, Facebook and other social network or communication sites. The IRS does not make use of any of these in order to communicate with taxpayers.
The official Internal Revenue Service web site is IRS.gov; the address appears in your browser as http://www.irs.gov/. Any other .com, .org or .net site that claims to represent the IRS is bogus.
Along those same lines, you may get mail or emails from third party tax resolution companies regarding your tax balance, especially if you owe a sum over $5,000.
Likely, this is because a Notice of Federal Tax Lien was filed. A Lien is a legal claim on an individual’s property for payment or satisfaction of a tax debt. It is a public notice, and tax resolution companies, eager to net new clients, scan online record searches for recent lien filings. These may or may not be legitimate companies; remember that there are no options available to third party CPA, attorney or anyone else that are not available to taxpayers. Better to contact the IRS directly and timely.
Financial identity theft and identity cloning are both used to make a fraudulent claim on refund money. Surprisingly, one third of ID thefts occur by a person known to the victim. Perhaps this is because they may have easier access to your personal information.
At times, a return may be filed under your Social Security number. The return will demonstrate a refund, likely to be sent to a PO Box or an account that will be quickly closed after the money is received. The refund may be based on items that do not need a source document. For example, a refund on Federal Withholdings needs to be supported by a copy of the W-2. However a refund based on certain post-tax credits may be claimed without additional documentation.
Another popular ID theft scheme is an individual who works under your name and or Social Security number in order to avoid paying taxes. If this is the case, your claim for refund may be held pending the additional income that appears was underreported, or you may be audited at a later date.
If you have any reason to believe that you have been a victim of ID theft, especially as it relates to your federal taxes, please contact the IRS at 1-800-829-1040. You may be asked to complete a Form 14039, ID Theft Affidavit, and submit it to the IRS along with a copy of your valid identification and a police report if you have one. These documents allow the Service to flag your account and pursue resolution on your behalf.
For additional information on identity theft, go to the IRS home page and type in the keyword ID Theft. You may also visit the U.S. Federal Trade Commission’s Web site at www.OnGuardOnline.gov for additional guidance. It is recommended that you contact Social Security Administration and the three major credit reporting bureaus as well.
Don’t be duped by anything that may come in the mail, or even a person that comes to visit you, making an assertion that you have a certain amount of refund waiting for you. The IRS does not figure anyone’s refund ahead of time and notify them that they have money waiting to be claimed.
The IRS may issue a press release or a reminder on their web site regarding undelivered refund checks, but does not make any specific information available. If you receive something that asks you for any kind of identifying information in order to claim your refund, a tax credit, an inheritance, a lottery winning or anything else, ignore it. Many of these requests will stipulate that you must pay a sum of money to the IRS, up front, to cover the “taxes” before you can obtain your funds. Not true.
Your refund can only be determined by you, after you file a tax return. Check on your status of your refund by going to IRS.gov, and clicking on the Where’s My Refund logo. You will need to know your Social Security Number, Filing Status, and exact whole dollar amount of your expected refund.
For examples of current phony emails and refund schemes, as well as how to recognize them and the actions to take, search the headings Suspicious E-Mails and Identity Theft at IRS.gov.