With the April 15th deadline now fading in the distance, many Floridians are anxiously awaiting the arrival of their tax refund.

Unfortunately, it is not only the taxpayers awaiting those checks – nefarious scammers of all kinds are dreaming up ways to get their hands on your hard-earned money. Your tax refund is at risk of being stolen by criminals, and people need to be alert. While there are many kinds of tax refund scams on law enforcement’s radar, there are two main types. Here’s how to identify a scammer and protect yourself from their schemes.

Two Common Tax Refund Scams

  1. Tax Identity Theft:  If the scammer has access to an individual’s identifying information – such as their full legal name, address, and social security number. Those really committed to their “mission” will likely also have information about where their target works and how they get paid. The criminal files a fake 1040 using all their target’s personal information and directs the payment to an account they opened or an alternate address.

    Obviously, the IRS won’t send duplicate refunds to the same taxpayer, and therefore, the scammer is hoping they file before their target does. Filing early in the season may protect you from falling victim to this scam.

  2. Government / IRS Imposters: The other tax-related fraud that is prevalent at this time of year involves direct communication from the scammer, typically a phone call. The scammer pretends to be an IRS agent and claims that you owe additional money. The caller will make threats that escalate quickly, often including the threat of imprisonment. They may assert that officers are “right down the street” or that “they will be there within hours.” the idea is to scare their victim into a knee-jerk reaction, paying cash immediately to stay out of trouble with the government.

    However, all citizens need to understand that the IRS will never call a citizen to collect a debt. If you owe additional money, they will send letters explaining the debt. If a taxpayer does not respond to the letters, they may take more severe action – such as liens on your property, levies of your bank account, or garnishment of your wages. They will never call and threaten you. Although these calls may seem legitimate and intimidating, they are false.

  3. Has Someone Compromised Your Social Security Number?

    A few red flags may indicate that a scammer has stolen your identifying information. If any of these apply to you, investigate promptly and take appropriate action. 

1) You received a W-2 or 1099 from an employer you did not work for

2) You received a notice that more than one tax return was filed

3) You received a call from someone claiming to work for the IRS 

4) You received a letter claiming you owe back taxes

You should never respond to the number provided on these correspondences. Instead, call the IRS direct utilizing the phone number advertised on their website. Once you contact the official number, you can determine the claim’s validity against you. Remember, the IRS will never call you – so all phone calls are a scam.

Important: To protect yourself, be sure that you keep records (such as the time and date) of all phone calls and any details you can remember. Keep all letters and other notifications that you received. Notify all three credit bureaus of the scam, and keep an eye on your credit reports to see if anything unexpected or fraudulent appears.

If you are afraid that you have been the victim of a tax scam, be sure to act quickly.

* Call the IRS Identity Protection Specialized Unit at 1-800-908-4490
* Fill out an IRS ID Theft Affidavit Form 14039
* File a report on the Federal Trade Commission website

A Twist to the Tax Scams

One variation of the above fraud scheme utilizes the public disclosure of bankruptcy information. The criminals use these public announcements to identify their victims, calling someone soon after their debt has been discharged. They may pretend they are from the IRS and demand a payment, or they may pose as a debtor that was somehow “left out” of the process – and demand money to prevent them from hauling you back into court.

Someone who is relieved to finally be out from under financial distress may react without thinking if they fear they are still in trouble. 

Your bankruptcy attorney can help you identify fraudulent claims based on your filing and discharge.

Call a Trusted Sarasota Bankruptcy Attorney

Richard V. Ellis has assisted hundreds of area residents in overcoming their financial challenges. Call today for more information or to schedule a consultation.