Beware of Unexpected Tax Return Deposits!
Criminals have been stealing client data from tax professionals and filing fraudulent tax returns. Then they use the taxpayers' real bank accounts for the deposit and use various tactics to try to reclaim the funds.
According to the IRS, here are some versions of the scam:
Criminals posed as debt collection agency officials acting on behalf of the IRS to contact the taxpayers to say a refund was deposited in error, and they asked the taxpayers to forward the money to their collection agency;
The taxpayer who received the erroneous refund received 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.
Taxpayers who file electronically may find that their tax return will reject because a return bearing their Social Security Number is already on file. If that’s the case, taxpayers should follow the steps outlined in the Taxpayer Guide to Identity Theft and may need to close their bank accounts. Taxpayers unable to file electronically should mail a paper tax return along with Form 14039, Identity Theft Affidavit, stating they were victims of a tax preparer data breach.
Also, notify your tax preparer directly.
Here are the official ways to return an erroneous refund to the IRS:
If the erroneous refund was a direct deposit:
Contact the Automated Clearing House (ACH) department of the bank/financial institution where the direct deposit was received and have them return the refund to the IRS.
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:
Write "Void" in the endorsement section on the back of the check.
Submit the check immediately to the appropriate IRS location listed below. The location is based on the city (possibly abbreviated) on the bottom text line in front of the words TAX REFUND on your refund check.
Don't staple, bend, or paper clip the check.
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 have 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) (see telephone and local assistance for hours of operation) 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.
Note - 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, here 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 Rivercenter 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
Let’s be careful out there!