Scam Alert: IRS says to watch out for fake tax refunds -

Scam Alert: IRS says to watch out for fake tax refunds

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(AP Photo/Manuel Balce Ceneta) (AP Photo/Manuel Balce Ceneta)

(Meredith) -- The IRS is urging taxpayers to be wary of a scam involving a fake tax return being deposited into their bank accounts. The scam is growing quickly and has already affected thousands.

Here's how the scam works. Using the stolen data of potential victims, scammers file fraudulent tax returns using victim's real bank account. Then the scammers will contact the victim with a phone call pretending to be the IRS or a debt collection agency and ask for the tax refund to be returned to their agency -- effectively stealing an erroneous tax refund.

Some people are also finding that when they go to legitimately file their taxes, they get a message saying their social security number is already on file and their return is rejected. If that is the case, those victims should follow this IRS guide for taxpayer identity theft.

Taxpayers who need to return a legitimate erroneous refund should follow this official IRS guide.

The IRS is also urging tax practitioners to beef up their security practices because that's where the scammers are reportedly getting the victim's information in the first place.

You can read the official press release regarding the scam on the official IRS website here.

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