Stories of scammers claiming to be with the IRS and taking advantage of unsuspecting taxpayers appear regularly, including here.
Turns out that the IRS is getting scammed as well.
As this Associated Press story from The Boston Globe reports, the IRS issued $4 billion — yes, billion with a B — in fraudulent tax refunds over the course of a year to criminals who were using other people’s personal information.
In some cases, the IRS’s desire to issue quick refunds plays right into the bad guys’ hands: The AP reports that 655 refunds were sent to ONE address in Lithuania.(Wouldn’t you think somebody might notice that?)
So how do the scammers do this? It all starts with stealing your Social Security number, and then filing a fraudulent tax return that generates a refund — which goes into the thief’s bank account, not yours.
The taxpayer typically doesn’t find out there’s a problem until she tries to electronically file her own tax return and gets a message from the IRS that another tax return using the same Social Security number has already been filed.
When someone else successfully files a fraudulent return using your Social Security number, your only recourse is to file your own return on paper and then fill out Form 14039, Identity Theft Affidavit. Then, hopefully, you’ll get your refund and be able to electronically file your return the following year.
Here’s a link to an IRS webpage on Identity Theft, which can also take you to that Theft Affidavit form.