It works like this: Cybercriminals secretly steal a taxpayer’s information from their  tax preparer’s computer server, uses their information to file a tax return under the taxpayer’s name and even asks the refund to be placed in the real taxpayer’s bank account. Then someone posing as an agent for a debt collection agency will contact the taxpayer saying the deposit was made in error and asks them to forward the money.

In response, the IRS is urging all tax preparers to increase their security and make sure they report data thefts as quickly as possible so it can take steps to protect taxpayers.

This scheme is likely just the first of many that will be identified this year, according to an IRS news release.

“Thieves know it is more difficult to identify and halt fraudulent tax returns when they are using real client data such as income, dependents, credits and deductions,” the agency stated. “Generally, criminals find alternative ways to get the fraudulent refunds delivered to themselves rather than the real taxpayers.”

Read more