IRS Issues Scam Alert for Erroneous Refunds

The Internal Revenue Service is warning taxpayers of a scam that involves erroneous tax refunds being deposited into their bank accounts.

One version of the scam, according to the IRS, involves criminals posing as debt collection agency officials on behalf of the IRS.  They contact taxpayers to say a refund was deposited in error, and they ask the taxpayers to forward the money to their collection agency.

Another version is the taxpayer who received the erroneous refund gets an automated call with a recorded voice saying he is from the IRS and threatens the taxpayer with criminal fraud charges, an arrest warrant and a “blacklisting” of their Social Security Number. The recorded voice gives the taxpayer a case number and a telephone number to call to return the refund.

Below are the official ways to return an erroneous refund to the IRS.

If the erroneous refund was a direct deposit:

  1. Contact the Automated Clearing House (ACH) department of the 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 for individuals or 800.829.4933 for businesses 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 to the appropriate IRS location. The location is based on the city 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.
  • If you no longer have access to a copy of the check, call the IRS toll-free at 800.829.1040 for individual or 800.829.4933 for businesses and explain to the IRS assistor that you need information to repay a cashed refund check.

For more information on the scam, click here.

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