Tax season is underway. This scene plays out too often: you gather all the paperwork, fill out the forms, and wait for a tax refund. Shortly after filing, you receive a notice from the Internal Revenue Service that your refund request has been denied; you have already received a refund based on your 2021 tax return.
Surprise! Welcome to the world of fraudulent tax returns. A criminal accessed your personal data, including your social security number, filed an electronic return, received a tax refund based on your information, and disappeared. These scams are occurring at an alarming rate fueled by data breaches – unauthorized access to personal information. We have a limited ability to contain data breaches beyond those for which we are responsible, such as providing personal information to unknown callers (state and federal government agencies do not call to request information). Most breaches occur beyond our reach when criminals hack into data collected by companies, organizations, or government agencies.
It can be difficult to know if you are the victim of tax fraud. Be proactive. Check with your state tax department or the IRS to see if there are any issues with your records. Has your tax refund been requested by someone else? Contact details: IRS — sa.www4.irs.gov/irfof/lang/en/irfofgetstatus.jsp or 800-829-1040; Vermont, myvtax.vermont.gov or 800-828-2865.
File a police report with local law enforcement, report the scam to the Federal Trade Commission at www.ftc.gov, the IRS, and if the crime involves state taxes, your state tax department. You can also prevent fraud. Register for online access to your tax records with state and federal tax departments. This can prevent criminals from creating a tax account in your name. File your taxes electronically to speed up the process and don’t forget to sign up for direct deposit. Regularly check tax accounts to see if there is unusual, unexpected or unexplained activity.
Tax season is already painful enough. Don’t let the scammers increase the misery.