The IRS has $1.1 billion in unclaimed tax refunds from 2014


However, another more ominous scam has appeared this year in which con artists steal tax return data from preparers, and then file returns in the victim's name. If the IRS is trying to collect a debt or audit you, they will always attempt to contact you by mail first.

"Because of these successes, criminals are devising more creative ways to steal more in-depth personal information to impersonate taxpayers".

Nevertheless, identity theft criminals remain active, with the Identity Theft Resource Centre (ITRC) recording 1,579 data breaches in 2017, up 45% from 2016, and Experian reporting that W-2 scams increased by nearly 80% over that period.

A woman who worked as a customer service rep for a student loan processor gave the personal information of student loan borrowers to a tax preparer, who in turn used the data to file fraudulent returns requesting large refunds. Of course, if borrowing from someone you know can endanger a relationship or make it more hard, take that into consideration. Overall, the number of identity-theft victims has fallen almost 65 percent between 2015 and 2017.

Other things scammers often do - but the IRS will not do - include asking for credit or debit card numbers over the phone, call taxpayers about an unexpected refund, demand that taxes be paid without giving taxpayers the opportunity to question or appeal the amount owed, and threaten to immediately bring in law enforcement to have the taxpayer arrested for not paying.

The taxpayer who received the erroneous refund gets an automated call with a recorded voice saying the caller is from the IRS. "If you have any doubts about who's contacting you then don't be bullied into taking immediate action".

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Schwab told CNN he'd "never" been in a situation "where someone asked me to deflect when we absolutely knew something was awry". In fact, Schwab told Oakland Fox affiliate KTVU that the raid netted more arrests than initially planned.

"You can establish a SEP for 2017 in 2018, as long as you do it before your 2017 filing return deadline", Machen said.

Take additional steps to limit the potential damage of identity theft. Generally, Americans have three years to file a past return before their refund money becomes property of the U.S. Treasury.

If the above options aren't available, or don't seem like the best alternative, you can apply to the IRS for an installment payment plan. "To whatever extent you can, try to file your tax return early", advises McBride.

This week, the Oregon FBI's Tech Tuesday segment focuses on building a digital defense against tax refund fraud.

Get your Refund Fast and File your Taxes for Free.