Tax Refund Scam
During the tax season, we may become victims of a tax refund scam because of our overexcitement about tax refunds that make us even more vulnerable to such scams. Many people are entitled to tax refunds every year, however, some tax years become even more interesting when the federal government announces additional tax refunds to millions of people. These additional tax refunds are usually in response to tough economic conditions and are meant to boost consumer spending and help the ailing economy. Of course, no one is supposed to mention the word "recession" not only because it’s a bad word but also because various formulas and numbers can be used to determine the state of the economy and the formulas can be contradicting and correct at the same time.
The IRS has been on high alert for sometime about tax refund fraud and even proactive at pursuing tax refund scammers until they are arrested and jailed. In order to file fake tax returns and claim other people's tax refunds, the scammers must first get their hands on valuable information and know how best to attract a victim’s attention in order to get all the information they need to commit their fraud. As such, conmen use authority, and victims’ weaknesses to obtain their personal information and commit not only tax refund fraud but also jury duty scams and lottery scams. Usually people fall victim to various scams faster when the scams appear to be initiated by an entity of authority such as the IRS, police department, and the FBI; prompting people to give all the information the scammer asks for. The tax refund scam can be effective either during the tax season or when the government announces special refunds. However, when the government announces tax refunds for millions of people, it becomes much easier for scammers to target individuals because more people fall in the scam target pool used for random selection. In other words, more people are entitled to tax refunds than in a regular tax season and when scammers contact their victims, there is less chance of rejection by their victims. For example, if you are contacted by a scammer regarding your tax refund but you know you owe taxes and the government has not reported any special tax refunds, you immediately become suspicious because the request is out of the norm and less credible.
In order to commit the tax refund scam and once the best timing has been determined, the scammers contact the victims by phone or email at random and introduce themselves to be from the IRS and maybe other credible organizations. Such contact is always initiated with a convincing introduction to make the request believable and gain victim’s trust. The introduction is then followed by good news such as "we are contacting you to ensure your tax refund is delivered as expeditiously as possible as required by the agency". The scammers then ask victims to provide certain personal information in order to send the refund, however, if any hesitation is noticed on the part of the victims, they warn their "victims to be" that any missing information in their database can lead to an indefinite delay of tax refunds.
One thing you should always remember is that if the IRS owes you any money, they will just send the money because they already have all your information. If you’ve ever filed income tax returns, you already know the amount of personal information that the IRS has collected about you and your family. All they need in order to send you the refund check is your name, address, and the amount you overpaid them, which they already have. So, the best action you can take when facing a tax refund scam is to ask scammers to keep the check and then hang up the phone.
Learn about tax filer identity theft after tax refund scam.