Last week, I found out that I was a victim of a tax fraud—someone else filed my taxes instead of me. To make matters worse, I was in the middle of purchasing and refinancing a home, which could have created big problems for me. I was, fortunately, able to fix everything, but it took me a few hours’ worth of online research and phone calls.
If you’re ever faced with this kind of situation, here are the three steps you need to take.
First, remember that IRS officers only communicate by mail, not by phone. In my case, the scam worked like this: Someone filed my taxes, and I received and deposited a refund check. The scammer called me sometime afterward, posing as an IRS agent, and said there had been a mistake. They told me I would need to send the money back to them.
So, if you get a check from the IRS that you didn’t expect or looks suspicious, don’t cash that check. Also, don’t send money to anyone based on a phone call. Everything must be in writing and communicated by mail.
Second, call someone to confirm that there’s fraud being attempted. You can start with your accountant—they can confirm whether the check is real or fake and provide instructions on what to do next. If you’re in the middle of a home purchase or refinance, call your mortgage broker right away and let them know what’s going and that everything’s getting fixed. After that, call the IRS. The direct phone number for their fraud line is 1-800-908-4490. They will process your claim over the phone so you don’t have to file anything.
Since federal taxes and state taxes are separate, you’ll have to call your state tax office separately to notify them that there has been fraud and to file a claim. The number for Arizona’s state tax office is (602) 716-6300.
You’ll also have to call a couple more places to let them know about the fraud. First is the Federal Trade Commission at 1-877-438-4338. Next is the Social Security Administration at 1-800-772-1213.
Lastly, take steps to prevent similar problems from happening down the road. You can do this by placing a 90-day fraud alert with the credit bureaus. The good thing here is that when you place a fraud alert with one credit bureau, the other two place it automatically. The number to contact Equifax is 1-800-525-6285.
Tax fraud is a common thing, so there’s no need to worry about it. Just follow these steps and you’ll be fine. In fact, according to IRS, a false tax return will not be disclosed if a mortgage company requests tax transcripts for the purpose of approving you for a loan, so this type of fraud attempt shouldn’t have any effect on a home purchase or refinance.
If you’d like more information on different kinds of tax fraud and how you can avoid these scams, I’ve included this link that leads you directly to the IRS website.
If you have any other questions about tax fraud or you’re thinking of buying, selling, or investing in real estate in the Phoenix area, don’t hesitate to reach out to me. I’d be happy to help you.