New IRS tax refund alerts on fraudulent tax refunds

The IRS issued two alerts in the last two weeks on cyber-crimes against tax preparers and taxpayers. The first alert, issued 2/2/18, recommends that tax preparers ensure they have strong cybersecurity measures in place, in light of recent data thefts. The second alert, issued 2/13/18, is targeted to taxpayers regarding fraudulent tax refunds as a result of the data thefts.

Cyber criminals are once again this year targeting tax preparers in order to steal client information. They want personal information such as social security numbers and the number of dependents plus how to contact the refund receiver.

A new scam seen in the last few weeks is impacting tax preparers and taxpayers both. The criminal files bogus tax returns for refunds and the refunds are then deposited into the taxpayers’ accounts. The scammer then contacts the refund recipient either by letter or by phone and tells them their refund was in error. The scammer demands the refund be sent to an IRS debt collector which really is the scammer.

Tax preparers are often victims of phishing email scams that someone in their office opens. This allows the malware for stealing client data to get into the tax preparer’s computer system.

The second alert warns taxpayers of the rapidly growing scam. In just days, the IRS saw an increase to thousands of taxpayers per day being asked to return bogus refunds to the scammers. The alert provides information for taxpayers regarding returning bogus refunds. It also provides the link to a useful IRS support site on identity theft.

What you can do

If you are a tax preparer:

· Contact the IRS Stakeholder Liaison if you think any of your data has been stolen

· Research the resources provided by the IRS supported Protect Your Clients; Protect Yourself campaign

· Don’t assume your tax service business is too small to be targeted

· Remind staff, including temporary or part-time help, to be vigilant with all cybersecurity measures

· Check out the alert for more details

· Have your cyber security specialist remove the malware

· Talk to your insurance agent about your cybersecurity coverage

If are a taxpayer:

· Check out this alert for more information

· Follow established IRS procedures for returning an erroneous refund to the agency; details are in the alert

· Notify your tax preparer if you have received a bogus refund or someone contacts you to return a refund

· Check out the Taxpayer Guide to Identity Theft site by the IRS

· Call your tax preparer if you see anything unusual regarding your tax refund

· Call your bank if you received a bogus refund; you may need to open a new account and close the impacted account

About the Author - Carolyn Schrader is a seasoned cybersecurity professional and founder of the Cyber Security Group Inc., providing corporate cybersecurity services to high profile clients.