How Thieves stole $5.2 Billion in Refunds in 2013, and Why They’re Targeting You Next

It’s 2016, and Tax Season is in full-swing. Some find themselves dreading the task, others can’t wait for their refund. Be cautious though; for scammers and identity thieves, it’s the best time of year to steal someone else’s money.

In 2013, the IRS gave out $5.2 billion in refunds to the wrong people – people who filed under someone else’s identity. They also stopped another estimated $24 billion in attempted fraud. Considering the average refund amount is between a few hundred to a thousand dollars, that’s a lot of stolen refunds. And, H&R Block estimates the number has roughly doubled since then. They could be targeting you next.

How They Do It

It’s easy for scammers to file under your name, because the IRS processes millions of refunds in a few short months. It isn’t until later, when they have all the information available, that they match your claim with the verifying information. If they checked your identity first, you would be waiting up to ten extra months for your refund.

If you think you’re safe, think again; scammers have creative ways of obtaining your information. They install malware on your computer, obtain copies of bank records, or they could trick you into giving away your information yourself. Some may even call or email you, pretending to be the IRS and promising a huge refund if you give your information, or arrest if you don’t. Some more skilled thieves gain your trust by proving they already have the last four digits of your social security number.

With all these tricks, it’s impossible for you to protect yourself. Right? Wrong. Here are some ways you can take matters into your own hands:

Be Alert to Fraud Attempts

It sounds obvious, but innocent people still fall for it. The main cause of this is, victims don’t know to watch out for fraud. If the IRS emails or calls you asking for information, it is always a scam. They will never ask for sensitive information in this way.

If you do receive an email from the IRS, don’t click on any links or call any numbers it provides. Instead, forward the email to

If you get a call from the IRS asking for personal information, hang up. Again, they will never contact you this way. If you feel like it might actually be the IRS, hang up anyway, then call them back at their toll-free assistance line for individuals, at (800) 829-1040 (or, if you’re filing as a business, (800) 829-4933). Odds are, the real IRS will answer, not the person you were talking to before.

NOTE: If you’re filing your taxes or providing any information online, always do it on a secure wi-fi connection. Using the wi-fi at a public library or another unsecure network can allow scammers to gain access to your computer. If you can’t avoid using a public network, make sure your virus software is up-to-date, and that you’re using a firewall.

File Early

When your social security number is used to file, any subsequent attempts with the same number will be rejected. If the second attempt is you, you’ll have to go through an extensive verification process.

Scammers will have no chance at passing that test. So rather than let them get a free pass, file first and beat them to the punch. Even if you know you’ll have to pay, file first anyway; you have until the April 15th deadline to submit any payments, regardless of when you filed.

As an extra incentive to file sooner, H&R Block introduced “A Grand in your Hand.” They gave $1,000 to 1,000 people who file through them, every day. The giveaway ended on Feb 15, 2016, but you should still file as early as possible. And H&R Block may have the same giveaway next year, so file as early as possible in 2017. After all, you definitely don’t want scammers winning an extra $1,000 on your behalf. Visit H&R Block’s official website for more information.

Put a PIN on it

To help prevent identity theft, the IRS is getting eligible filers to sign up for a unique PIN. Filing your taxes is the only task this PIN would be used for. And to protect its security, the IRS will send you a new PIN every December by mail.

The good side of this is, it’s an extra-thick layer of security to stop potential thieves. The bad side is, it’s an extra number for you to keep track of. And once you’ve opted into the service, you can’t opt out. If you keep good, secure records though, it shouldn’t be a problem. But don’t store your PIN on any electronic device that can connect to the internet; just hang on to the paper copy the IRS sends you, and have it with you when you file.

Following all these steps wraps your refund in a condom of security. But even condoms only have a 99% effectiveness rate. Your security is never truly guaranteed, but you can rest easy knowing how hard scammers would have to work to get at it. Just remember to stay alert and knowledgeable about it, and don’t spend your entire refund in one place.

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