Taking back the ID

EFIN tax scam, selecting reputable tax preparers, weather-related scams

Unusual circumstances open opportunities for fraudsters, and 2021 is no exception. Not only has an uptick in online tax filings during the pandemic spurred new ways to cheat Americans out of their refunds, but utility scams related to winter deep-freezes are on the rise. Here’s what you should do to protect yourself.

Like many conscientious taxpayers, Susan filed her tax return early with a tax professional who told her she’d receive a refund. After waiting for months, she contacted the U.S. IRS, which said that a refund check had been issued in late April. She tried to contact her tax pro, but he was nowhere to be found. The IRS told her that she was a victim of tax-refund fraud.

This case is fictional, but it’s representative of a common type of tax scam aimed toward taxpayers and tax professionals. Indeed, the public has had to be particularly vigilant this year when everything from tax to utility fraud have hit the headlines. (See sidebar Fraudsters commit weather-related utility scams.)

But tax refund fraud has long been a lucrative scam for fraudsters and continues to be so. (See Identity theft tax-refund fraud: A growing epidemic, part 1 of 2, by Robert Holtfreter, Tiffany McLeod and Adrian Harrington, Fraud Magazine, March/April 2014.)

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