Tax Refund Fraud

man in his office reading papers

Scammers obtain personal information such as Social Security numbers (SSNs), birthdates, and other sensitive data through data breaches, phishing, or other forms of identity theft. Using the stolen information, the scammers file fraudulent tax returns with the IRS early in the tax season. They often use falsified income data and deductions to maximize the refund amount. Next, the scammer directs the refund to an account they control, often through prepaid debit cards or other untraceable financial instruments. The legitimate taxpayer may only discover the fraud when they file their tax return and learn that a return has already been filed under their SSN.

  • Receiving an unexpected notice or letter about a tax return you did not file.
  • Notice that more than one tax return was filed for you.
  • Agency records of income from an employer you did not work for.
  • Not receiving an expected tax refund due to a fraudulent return sent to the scammer instead.
  • The IRS or the Comptroller of Maryland will never:
    • Initiate contact with taxpayers by email, text, or social media to request personal or financial information.
    • Call taxpayers with threats of lawsuits or arrests.
    • Call, email, or text to request taxpayers’ Identity Protection PINs.
  • Be cautious with personal information, especially online. Use strong, unique passwords for financial accounts and enable two-factor authentication.
  • Regularly check bank statements, credit reports, and IRS accounts for unusual activity.
  • File your tax return as early as possible to reduce the window of opportunity for scammers to file a fraudulent return.
  • Obtain an Identity Protection PIN (IP PIN) from the IRS. This six-digit number helps prevent someone else from filing a tax return using your SSN.

References: