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TheStreet Open House

Tax Refund Thefts On The Rise





Scammers are always trying to find ways to steal your money

WASHINGTON, March 18, 2013 /PRNewswire-USNewswire/ -- You're not the only one waiting for your tax refund. Scammers are looking for it too. In fact, every year there are more and more scams designed to steal tax refunds.

The Internal Revenue Service (IRS) says these kinds of thefts have increased substantially in the last few years. Between 2010 and 2012, the number of investigations opened by the IRS grew from 224 to 898, according to the latest figures.

Find out more about tax refund scams, how to protect yourself from identity theft and what to do if you are a victim.

It All Starts with Identity Theft

Tax refund thefts usually begin when someone steals your personal information, such as your Social Security number. This is called identity theft.

To get your information, scammers use a technique called phishing, where a scammer tries to fool you into revealing your personal data.

This is how it works:

  • They send you fake e-mail messages or websites pretending to be someone they're not, such as the IRS or the Social Security Administration.
  • They ask you to provide your personal or financial information such as your Social Security number or your credit card numbers.

Once they have the information they need, they file your taxes in your name and wait until they get your refund.

How to Protect Yourself

This is what you can do to protect yourself from this scam:

  • The IRS does not initiate contact via e-mail with issues regarding your tax return.
  • Be careful with websites that pretend to be the IRS. The official IRS website is http://www.irs.gov/.
  • If somebody calls you and says they are an employee of the IRS, take down their employee identification number and call 1-800-829-1040 to make sure the call is legitimate.
  • Do not provide your Social Security number or other personal information to anybody you consider suspicious.

What to Do If You Are a Victim

Many taxpayers find out they are victims of tax refund scams when they get a letter from the IRS saying their taxes have been filed twice. If you get such a letter, contact the IRS immediately to try to correct the situation.

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