That Refund You Weren’t Quite Expecting from the IRS? Don't Spend it Yet.

March 3, 2021

Most of us aren’t filing our 2020 income taxes right on the dot of January 1st. For any number of reasons, push doesn’t come to shove for most tax preparers until March or April.

That doesn’t stop criminals from getting an early start on trying to cheat you. They’re always finding new tricks to make their scams look more convincing. And what could be more convincing than finding a refund from the IRS already in your bank account?

What, you say? You haven’t even filed yet? Or you did but it’s too soon? Or the numbers don’t match up? That’s because somebody else beat you to it – stole your information (Social Security Number or Taxpayer Identification Number and bank account information), filed a bogus return under your identity (with a hefty overpayment), and had the refund direct deposited to your account.

Here’s the hook: once the deposit hits your account, the fraudster calls, posing as an IRS employee and says there's been an error. The IRS needs the money returned immediately (typically in the form of a particular type of gift card) or penalties and interest will result. Of course you don’t want to keep money that’s not yours. And you do not want to risk the wrath of the IRS, so you do as they request. The con artist pockets the money and leaves you with nothing.

This can be a very convincing ploy, one which leaves you very little recourse for getting your money back, since as far as Internal Revenue knows, the return and refund are legitimate.

The IRS wants you to know that it will never demand payment (or repayment) by a specific method. There are many payment options available, as well as a process that enables you to question the amount of tax the IRS says you owe (or are getting back). If you ever receive an unexpected refund and a call demanding a repayment, you should immediately contact your banking institution and the IRS.



This article is designed to provide informative material and is distributed with the understanding that it does not constitute legal or other professional advice. Opinions expressed herein are subject to change without notice. Information has been obtained from sources believed to be reliable, but its accuracy and interpretation are not guaranteed.

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