Archive for April 16, 2018

Help! I Got An Extra Tax Refund!

Written by Finance Video. Posted in Uncategorized

So you haven’t even filed your taxes yet and you got a refund from the IRS. Free money, right? Not to mention the time you just saved gathering all the paperwork, going to your financial advisor or accountant, and filing your 1040.

Unfortunately, nothing with the IRS is ever that easy. It may be an actual government error (in which case you are liable for the money if and when the correction shows up), or you may have just become an unwitting participant in the latest tax scam.

In this particular fraud, all the scammer needs is your name, address, and optionally social security number, to file a federal tax return on your behalf, with a hefty refund. Of course, the deception doesn’t end there. All the fraudster will have done so far is get a check sent to you.

This is where things get interesting. The scammer needs to find a way to get your money — and it is your money, the IRS won’t take the hit — once you have the check. They will often do this with increasingly threatening letters and phone calls, sometimes acting as (fake) representatives of the IRS, and sometimes posing as lawyers or law enforcement, to get you to surrender some or all of your “refund” to the scammer.

In one case, the perpetrators even acted as pretend financial advisors, “helping” people through the situation and “filing” honest returns for a percentage of the extra refund. In this particular case, the new returns created more havoc, causing the IRS to collect back the false refunds, and leaving the victims owing more than ever.

So what should you do if this happens to you? First and foremost, DO NOT CASH THE CHECK! Instead, void the check and send it back to the IRS. If it shows up in your bank account by direct deposit, tell your bank it is an error. Then, consult with a trusted financial adviser to maximize your real tax refund. It might take a bit longer, and the check might not be quite as spectacular, but this way you can rest assured your refund money is actually yours to spend!