Consumer Alert: Don’t fall victim to this tax return scam


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NEW YORK — It’s tax day and you’ll want to pay close attention to your bank balance and your tax refund this year. Scammers have found a new way to steal that tax refund: the IRS says they’re hacking tax preparers.

Over the past five years, scammers have stolen $63 million from taxpayers and with this year’s scam, you could be their next victim just like Police Officer David Woods who supports a family of five on his city salary.

So when he went to check his bank balance one day, he was surprised to find a higher balance than normal.

“I had about $9,015 more than I anticipated.”

There’s just one problem.

“I knew something wasn’t right.”


“I did not file my taxes. I didn’t get my W-2 to file my taxes,” he said.

“So there’s no way you could have had a refund.”

“None. No. That’s when I knew there was something way out of place.”

He was right. It’s a new tax scam.

Here’s how it works: the criminals get their hands on returns from previous years, then use that information to file new fraudulent returns on unsuspecting victims.

After the refund goes into the victim’s bank account, the crooks — posing as debt collectors for the IRS — follow up with a phone call claiming the refund was an error, then direct them to a fraudulent website to return the money.

Sure enough, scammers called Officer Woods a week later.

“I told her, I said ‘You listen to me, you piece of crap….'”

Suffice to say he told them off.

“It’s crooks and cheats, I don’t like it.”

He returned the money to the government, but now the IRS says his real refund of $3,000 will be delayed, possibly for months.

And he’s not the only victim in his hometown.

“I had a gut feeling something was wrong.”

Tax preparer Annette Kraft said at least 230 of her clients have been affected by the scam.

“They are losing out because they were expecting this money.”

Like 91-year-old Ray Prothro who found out about the scam from the IRS while being interview by CBS News.

A 2017 tax refund had been filed under his social security number.

“They ought to go to jail,” said Prothro.

His refund will be coming late as will tire shop manager Jerry Duvall’s $5,800 return – already more than two months late.

“We planned on, taking care of expenses, getting caught up on bills. We counted on it.”

On the day he was interviewed he missed a $200 car payment.

“My car got repo-ed,” he said.

It’s not just one tax preparer here in Duncan, Oklahoma. CBS News learned that there may be as many as 100 tax preparers across the country affected by this scam, and those are just the ones that they know of. Tens of thousands of taxpayers may be affected.

Don Ford heads the IRS Criminal Investigation Division.

“We’ve seen an enormous uptick in the activity. Hackers attempting to get information from tax professionals.”

His agents showed us where hackers then sell that information on the dark web. One seller offered this as an example: it’s a Midwestern couple’s full 2016 tax return. Most of the victims don’t even realize that information is out there.

The IRS is investigating, but says the crooks are likely organized crime rings overseas – and out of reach.

But back in Duncan, Kraft said the damage they’ve done to her business is real.

“My clients are more like a family. I want them to know that they can trust me, that I can trust them and that I look out for their best interest, or try to. It really…it hurts.”

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