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IRS: Criminals are filing tax refunds on behalf of victims, then trying to steal the money

MGN

There is a massive tax refund scam going around and the Internal Revenue Service says it involves erroneous tax refunds that are being dropped into victims' bank accounts.

IRS officials discovered the scheme earlier this month when it was discovered that thieves stole computer files belonging to tax professionals. The thieves then filed fraudulent tax returns on behalf of the victims.

Here is how the scheme works:

After the tax refund appears in the victim's bank account, the criminals pose as a debt collection agency to say the refund was deposited in error and the taxpayer must return the money to their agency.

Or, the criminals pose as IRS officials and call the victim with threats of an arrest warrant if the money isn't returned.

So what should you do?

The IRS says you should be wary if your actual tax return is rejected because another return bearing your social security number is already on file. If this has happened to you, click here to find out what to do next.

If you've already received an erroneous tax refund, follow these steps:

If the erroneous refund was a direct deposit:

  1. Contact the Automated Clearing House (ACH) department of the bank/financial institution where the direct deposit was received and have them return the refund to the IRS.
  2. Call the IRS toll-free at 800-829-1040 (individual) or 800-829-4933 (business) to explain why the direct deposit is being returned.

If the erroneous refund was a paper check and hasn't been cashed:

  1. Write "Void" in the endorsement section on the back of the check.
  2. Submit the check immediately to the appropriate IRS location listed below. The location is based on the city (possibly abbreviated) on the bottom text line in front of the words TAX REFUND on your refund check.
  3. Don't staple, bend, or paper clip the check.
  4. Include a note stating, "Return of erroneous refund check because (and give a brief explanation of the reason for returning the refund check)."

The erroneous refund was a paper check and you have cashed it:

  • Submit a personal check, money order, etc., immediately to the appropriate IRS location listed below.
  • If you no longer have access to a copy of the check, call the IRS toll-free at 800-829-1040 (individual) or 800-829-4933 (business) (see telephone and local assistance for hours of operation) and explain to the IRS assistor that you need information to repay a cashed refund check.
  • Write on the check/money order: Payment of Erroneous Refund, the tax period for which the refund was issued, and your taxpayer identification number (social security number, employer identification number, or individual taxpayer identification number).
  • Include a brief explanation of the reason for returning the refund.
  • Repaying an erroneous refund in this manner may result in interest due the IRS.

IRS mailing addresses for returning paper checks

For your paper refund check, here are the IRS mailing addresses to use based on the city (possibly abbreviated). These cities are located on the check’s bottom text line in front of the words TAX REFUND:

  • ANDOVER - Internal Revenue Service, 310 Lowell Street, Andover MA 01810
  • ATLANTA - Internal Revenue Service, 4800 Buford Highway, Chamblee GA 30341
  • AUSTIN - Internal Revenue Service, 3651 South Interregional Highway 35, Austin TX 78741
  • BRKHAVN - Internal Revenue Service, 5000 Corporate Ct., Holtsville NY 11742
  • CNCNATI - Internal Revenue Service, 201 West Rivercenter Blvd., Covington KY 41011
  • FRESNO - Internal Revenue Service, 5045 East Butler Avenue, Fresno CA 93727
  • KANS CY - Internal Revenue Service, 333 W. Pershing Road, Kansas City MO 64108-4302
  • MEMPHIS - Internal Revenue Service, 5333 Getwell Road, Memphis TN 38118
  • OGDEN - Internal Revenue Service, 1973 Rulon White Blvd., Ogden UT 84201
  • PHILA - Internal Revenue Service, 2970 Market St., Philadelphia PA 19104
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