What The IRS Is Doing To Stop Fraudulent Returns And New Tax Scams

fraudulent returns

In the past few years, as tax season approached the deadline, it has been typical for cyber criminals to step up their game.

This year is no exception according to The Internal Revenue Service. In fact, just a few days ago the IRS issued a warning about a new email tax scam with the subject line “IRS Refunds.”

An article at accountingtoday.com explains that, “The IRS has been seeing the scam used by cybercriminals to trick people into opening a link or attachment in the e-mail. The link takes unsuspecting victims to a bogus web page where cybercriminals try to steal personally identifiable information, including their Social Security number.” In addition, the article states that, “The links and attachments can also secretly download malware that can perform many functions, such as giving the thief control of the computer or tracking keystrokes to find other sensitive passwords or critical data.”

IRS Does Not Randomly Contact Taxpayers Or Tax Professionals Via Email

It is important to keep in mind that the IRS initiates most contracts through regular mail delivered by the Post Office. That’s called snail mail. They do not send emails, text messages nor do they contact individuals or businesses by phone.

As accountingtoday.com points out however, “There are special circumstances in which the IRS will telephone or visit a home or business, such as when a taxpayer has a tax bill overdue, to get a delinquent tax return or an employment tax payment, or to stop by a business as part of an audit or criminal investigation. Even then, taxpayers usually receive several letters (called “notices”) beforehand from the IRS in the mail.”

IRS Tax Fraud Prevention Efforts

We have reached the close of the 2017 tax season and the IRS has seen its share of fraudulent tax returns trying to make it through the system. Fortunately, the IRS has stepped up their game too.

The latest report as published at accountingtoday.com states that, “As of Feb. 24, 2018, the IRS reported that it identified 9,557 tax returns with approximately $46 million claimed in fraudulent refunds and prevented $22.2 million (48.3 percent) in fraudulent refunds from being issued. In addition, the IRS said it prevented approximately 7,376 fraudulent electronically filed tax returns as of Feb. 28, 2018, and 1,442 paper-filed tax returns as of March 15, 2018, from being accepted into the processing system. The IRS also identified and confirmed 2,204 fraudulent tax returns involving identity theft as of February 28, 2018 and identified 13,964 prisoner tax returns for screening as of February 24, 2018.”

As you can see from the report, the criminals have been very busy. Despite the best efforts at the IRS there are those fake returns that did get through. While they may not have been detected in the system, they could get caught with the help of alert taxpayers who are aware of another scam the IRS warned about earlier in the season, which I wrote about in February. (New Tax Scam Deposits Refunds In Your Bank Account)

This scam is one in which the criminals filed fake returns and had refunds deposited in real taxpayers’ bank accounts. The criminals then call the taxpayers pretending to be IRS representatives attempting to get the unsuspecting taxpayer to turn over the refund. If you notice an unexpected deposit from the IRS in your account, contact the IRS right away. And do not turn the money over the criminals when they call…and yes, they will call!