IRS Refund Check Scam: A Comprehensive Guide
December 6, 2024
Tax Refund Check Scam
IRS refund check scams can be a big problem for taxpayers. These scams trick people into cashing fake checks or sharing personal information with scammers who pretend to be from the IRS. Falling for these tricks can mean losing money, having your identity stolen, or even facing legal trouble.
The IRS’s “Dirty Dozen” list highlights the top scams, including refund check fraud.[1] These scams are most common during tax season, when taxpayers may be targeted with fake checks, phishing emails, or dishonest tax preparers.
Knowing the warning signs can help you stay safe. In this guide, you'll learn how refund check scams work, signs to watch for, and steps/protocols to take if you’re affected.
IRS Refund Check Scams Explained
IRS refund check scams involve fake tax return checks and scammers pretending to be IRS agents. Usually, scammers send a fake refund check and then contact the taxpayer, saying there was a mistake with the payment amount. They might ask for the extra money back or ask for personal information to "verify" the person’s identity. These scams trick people by looking official and using convincing methods.
Remember, the IRS rarely contacts people by email, phone calls, or text messages. If you get a message like this, it’s probably a scam. Always be suspicious of anything that's not a letter in the mail.
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How IRS Refund Check Scams Work
Scammers use various methods to carry out IRS refund check scams, including:
- Fake checks.
- Phishing emails.
- Phone calls.
- Counterfeit web portals.
Let’s look more in-depth at how each of these work.
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1. Fake Checks Sent in the Mail
Scammers might send a fake IRS refund check that looks real. Afterward, they contact the recipient, saying the IRS sent too much money by mistake. They demand the "extra" money be sent back quickly, often using a method like a wire transfer, a transfer app/service, or a prepaid card, which can’t be undone. The taxpayer loses money when the check bounces.
2. Phishing Emails and Phone Calls
Sometimes, scammers contact people by email or phone, pretending to be from the IRS. They say there’s a problem with the refund and ask for bank details or Social Security numbers to fix it. They use this information to steal identities or empty bank accounts.
3. Fake Online Refund Portals
Scammers may send you to fake IRS US Treasury websites that look real. These sites ask for personal information to process your refund. Always make sure an official website ends in ".gov" before entering any details. This indicates that the site is truly government-managed.
IRS Refund Check Scam Warning Signs
Recognizing warning signs can help you avoid becoming a victim of an IRS refund check scam.
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Unexpected Checks or Payments
If you receive an unexpected IRS refund check or direct deposit payment, this could be a red flag. The IRS typically does not issue refunds without prior communication. You can verify your status by logging into your IRS account on their official website.
Urgent or Threatening Language
Scammers often use high-pressure tactics, such as threats of penalties or legal action, to push victims into acting quickly. A legitimate IRS notice will never demand payment immediately or threaten you with arrest.
Requests for Personal or Financial Information
The IRS will not ask for sensitive information over the phone or email. Any request for Social Security numbers, bank details, or other 'where's my' private information should be treated with suspicion. IRS communication is typically done via official letters sent through the mail.
Suspicious Communication Channels
If you’re asked to contact a number or visit a website that doesn’t seem official, this could be a phishing attempt. The IRS website (irs.gov) is the only trusted site for tax-related issues. Again, always double-check website URLs for legitimacy.
What to Do if You Recognize a Fraudulent Tax Refund Check Scam
If you suspect a refund check scam, take these steps:
- Do not cash the check.
- Contact the IRS directly.
- Report the scam.
- Avoid sharing personal information.
Cashing a fake IRS check can cause serious financial and legal problems. If you think a check is fake, don’t try to cash it. Always verify with the IRS. You can call 1-800-829-1040 or check your IRS account online to see if you have any pending refunds.
Report scams to the Treasury Inspector General for Tax Administration or the Federal Trade Commission (FTC) to help stop scammers.[2],[3] Never give out sensitive information like your Social Security number unless you’ve confirmed the source.
Legitimate agencies will never ask for your personal information by email or unsolicited calls.
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What to Do if You Have Been Scammed
If you fall victim to a refund check scam, it’s crucial to act quickly to protect your finances and personal information.
1. Report the Fraudulent Tax Incident to the IRS
Inform the IRS if you believe your identity has been compromised.[4] They may advise you on the next steps to take to secure your information, like freezing your IRS account to prevent further fraudulent activity.
2. Place a Fraud Alert on Your Credit
Contact one of the three major credit bureaus (Experian, Equifax, or TransUnion) to place a fraud alert on your credit file.[5],[6],[7] This can help prevent scammers from opening new accounts in your name.
3. Monitor Bank Accounts and Credit Reports
Regularly review your bank accounts and credit reports for any suspicious activity. Many banks and credit bureaus offer tools to monitor your credit and alert you of any unusual transactions. This is crucial to catching identity theft early.
4. File a Report with the FTC
The FTC handles cases of identity theft. Filing a report can help you create an action plan for protecting your identity. The FTC can also provide additional resources and guidance for victims of tax-related scams.
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Protect Yourself From Scams with Centier by Your Side
Internal Revenue Service (IRS) refund check scams / tax fraud are designed to exploit taxpayer trust and gain access to personal information or funds. By recognizing common scam tactics and knowing the steps to take if you encounter one, you can protect yourself and your finances.
For more guidance on secure banking and financial protection, consider scheduling an appointment with a Centier representative. They can help you stay vigilant and make the best choices for safeguarding your assets. Don’t let scammers take advantage.
For more information about how to prevent and respond to scams, visit our security & fraud-prevention center.
Sources:
[1] https://www.irs.gov/newsroom/dirty-dozen
[2] https://www.tigta.gov/reportcrime-misconduct
[3] https://reportfraud.ftc.gov/
[4] https://www.irs.gov/help/tax-scams/report-a-tax-scam-or-fraud
[5] https://www.experian.com/fraud/center.html
[6] https://www.equifax.com/personal/credit-report-services/credit-fraud-alerts/
[7] https://www.transunion.com/fraud-alerts
