Refunds associated with federal income tax returns remain a crucial potential revenue stream to buy-here, pay-here dealers either as a pathway to deferred down payments or a method customers can use to become current again on their accounts.
Well, the Internal Revenue Service issued a warning about a new twist on an old scam involving those refunds. The IRS said criminals are depositing fraudulent tax refunds into individuals’ actual bank accounts, then attempting to reclaim the refund from the taxpayers.
According to the IRS, here are the basic steps criminals follow to carry out this scam. The thief:
— Hacks tax preparers’ computers to steal taxpayer data.
— Uses the stolen information to file tax returns as the taxpayers.
— Has refunds deposited into taxpayers’ bank accounts.
— Contacts their victims, telling them the money was mistakenly deposited into their accounts and asks them to return it.
While the IRS is aware of variations of this scam, the agency also knows that this scam may continue to evolve. Here are two current versions of this scam:
— Criminals pose as debt collection agency officials acting on behalf of the IRS. The thief contacts the taxpayer to report an erroneous refund deposit and request that the taxpayer forward the money to the thief’s collection agency.
— The taxpayer who received the erroneous refund gets an automated call with a recorded voice saying the caller is from the IRS. The recording threatens the taxpayer with criminal fraud charges, an arrest warrant and a “blacklisting” of his or her Social Security number. The recorded voice gives the taxpayer a phony case number and telephone number to call to return the refund.
IRS reiterated three reminders taxpayers should remember if someone contacts them about an erroneous refund:
— There are established procedures taxpayers should follow to return erroneous funds to the IRS. Tax Topic Number 161 - Returning an Erroneous Refund has full details about how to return the money, including the actual mailing addresses where a taxpayer should send a paper check, if necessary. By law, interest may accrue on erroneous refunds.
— The IRS encourages taxpayers to discuss the issue with their financial institutions because there may be a need to close bank accounts.
— Taxpayers receiving erroneous refunds also should contact their tax preparers immediately.