Warning

IRS Warns of New Scam — Falsely Filed Returns with Refunds Deposited into Taxpayer’s Account

Yeo & Yeo CPAs & Business Consultants

The Internal Revenue Service issued a new warning for taxpayers to be alert for a quickly growing scam involving erroneous tax refunds being deposited into taxpayers’ bank accounts. Criminals have put a new twist on an old scam: They file fraudulent tax returns and use taxpayers' real bank accounts for the deposit of the fraudulent refunds. Then they use various tactics to reclaim the refund from the taxpayers. Here is what you need to be wary of:

  • In one version of the scam, criminals pose as debt collection agency officials acting on behalf of the IRS. The criminal contacts the taxpayer to resolve a refund deposited in error and requests that the taxpayer return the refund to them, the fraudulent collection agency.
  • In another version, the taxpayer who received the erroneous refund gets an automated call with a recorded voice saying he is from the IRS and threatens the taxpayer with criminal fraud charges, an arrest warrant and a “blacklisting” of their Social Security Number. The recorded voice gives the taxpayer a case number and a telephone number to call to return the refund.

The IRS has urged taxpayers to follow established procedures (outlined below) for returning an erroneous refund to the agency. The IRS also encouraged taxpayers to contact their tax preparers immediately and to discuss the issue with their financial institutions because there may be a need to close bank accounts.

Here are the official ways to return an erroneous (fraudulent) refund to the IRS:

 If the erroneous refund was a direct deposit:

  1. Contact the Automated Clearing House (ACH) department of the bank or financial institution where the direct deposit was received and have them return the refund to the IRS.
  2. Call the IRS toll-free at 800-829-1040 (individual) or 800-829-4933 (business) to explain why the direct deposit is being returned.

 
 If the erroneous refund was a paper check and hasn't been cashed:

  1. Write "Void" in the endorsement section on the back of the check.
  2. Submit the check immediately to the appropriate IRS location listed below.
  3. Do not staple, bend, or paper clip the check.
  4. Include a note stating, "Return of erroneous refund check because (and give a brief explanation of the reason for returning the refund check)." 


 If the erroneous refund was a paper check and you cashed it

Submit a personal check, money order, etc., immediately to the appropriate IRS location listed below.

If you no longer have access to a copy of the check, call the IRS toll-free at 800-829-1040 (individual) or 800-829-4933 (business) and explain to the IRS assistor that you need information to repay a cashed refund check.

Write on the check/money order: Payment of Erroneous Refund, the tax period for which the refund was issued, and your taxpayer identification number (social security number, employer identification number, or individual taxpayer identification number).

Include a brief explanation of the reason for returning the refund.

Repaying an erroneous refund in this manner may result in interest due the IRS.

IRS mailing addresses for returning paper checks

For your paper refund check, following are the IRS mailing addresses to use based on the city (possibly abbreviated). These cities are located on the check’s bottom text line in front of the words TAX REFUND:

  • ANDOVER – Internal Revenue Service, 310 Lowell Street, Andover MA 01810
  • ATLANTA – Internal Revenue Service, 4800 Buford Highway, Chamblee GA 30341
  • AUSTIN – Internal Revenue Service, 3651 South Interregional Highway 35, Austin TX 78741
  • BRKHAVN – Internal Revenue Service, 5000 Corporate Ct., Holtsville NY 11742
  • CNCNATI – Internal Revenue Service, 201 West River Center Blvd., Covington KY 41011
  • FRESNO – Internal Revenue Service, 5045 East Butler Avenue, Fresno CA 93727
  • KANS CY – Internal Revenue Service, 333 W. Pershing Road, Kansas City MO 64108-4302
  • MEMPHIS – Internal Revenue Service, 5333 Getwell Road, Memphis TN 38118
  • OGDEN – Internal Revenue Service, 1973 Rulon White Blvd., Ogden UT 84201
  • PHILA – Internal Revenue Service, 2970 Market St., Philadelphia PA 19104

Please be wary of calls from individuals claiming to be IRS agents or collection agents working for the IRS, or if you receive an unexpected refund. Contact your Yeo & Yeo tax professional if you have questions or need assistance.

 

Yeo & Yeo CPAs & Business Consultants

Yeo & Yeo CPAs & Business Consultants

Yeo & Yeo CPAs & Business Consultants is a leading Michigan accounting firm. Since 1923, our industry-specialized Michigan accountants and consultants have provided clients with forward-thinking, comprehensive solutions in accounting, audit, tax, technology and business consulting.