Category Archives: Tax Refund Fraud

Who Stole 3.6M Tax Records from South Carolina?

April 16, 2024

For nearly a dozen years, residents of South Carolina have been kept in the dark by state and federal investigators over who was responsible for hacking into the state’s revenue department in 2012 and stealing tax and bank account information for 3.6 million people. The answer may no longer be a mystery: KrebsOnSecurity found compelling clues suggesting the intrusion was carried out by the same Russian hacking crew that stole of millions of payment card records from big box retailers like Home Depot and Target in the years that followed.

IRS Will Soon Require Selfies for Online Access

January 19, 2022

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If you created an online account to manage your tax records with the U.S. Internal Revenue Service (IRS), those login credentials will cease to work later this year. The agency says that by the summer of 2022, the only way to log in to irs.gov will be through ID.me, an online identity verification service that requires applicants to submit copies of bills and identity documents, as well as a live video feed of their faces via a mobile device.

The Taxman Cometh for ID Theft Victims

January 29, 2021

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The unprecedented volume of unemployment insurance fraud witnessed in 2020 hasn’t abated, although news coverage of the issue has largely been pushed off the front pages by other events. But the ID theft problem is coming to the fore once again: Countless Americans will soon be receiving notices from state regulators saying they owe thousands of dollars in taxes on benefits they never received last year.

IRS to Make ID Protection PIN Open to All

December 4, 2020

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The U.S. Internal Revenue Service (IRS) said this week that beginning in 2021 it will allow all taxpayers to apply for an identity protection personal identification number (IP PIN), a single-use code designed to block identity thieves from falsely claiming a tax refund in your name. Currently, IP PINs are issued only to those who fill out an ID theft affidavit, or to taxpayers who’ve experienced tax refund fraud in previous years.

FEMA IT Specialist Charged in ID Theft, Tax Refund Fraud Conspiracy

June 18, 2020

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An information technology specialist at the Federal Emergency Management Agency (FEMA) was arrested this week on suspicion of hacking into the human resource databases of University of Pittsburgh Medical Center (UPMC) in 2014, stealing personal data on more than 65,000 UPMC employees, and selling the data on the dark web.

Human Resources Firm ComplyRight Breached

July 19, 2018

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Cloud-based human resources company ComplyRight said this week that a security breach of its Web site may have jeopardized sensitive consumer information — including names, addresses, phone numbers, email addresses and Social Security numbers — from tax forms submitted by the company’s thousands of clients on behalf of employees.
Cloud-based human resources company ComplyRight said this week that a security breach of its Web site may have jeopardized sensitive consumer information — including names, addresses, phone numbers, email addresses and Social Security numbers — from tax forms submitted by the company’s clients on behalf of employees.

Pompano Beach, Fla-based ComplyRight began mailing breach notification letters to affected consumers late last week, but the form letters are extremely vague about the scope and cause of the breach. Indeed, many readers who received these letters wrote to KrebsOnSecurity asking for more information, as the company hadn’t yet published any details about the breach on its Web site. Also, most of those folks said they’d never heard of ComplyRight and could not remember ever doing business with a company by that name.

Deleted Facebook Cybercrime Groups Had 300,000 Members

April 16, 2018

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Hours after being alerted by KrebsOnSecurity, Facebook last week deleted almost 120 private discussion groups totaling more than 300,000 members who flagrantly promoted a host of illicit activities on the social media network’s platform. The scam groups facilitated a broad spectrum of shady activities, including spamming, wire fraud, account takeovers, phony tax refunds, 419 scams, denial-of-service attack-for-hire services and botnet creation tools. The average age of these groups on Facebook’s platform was two years.

When Identity Thieves Hack Your Accountant

April 11, 2018

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The Internal Revenue Service has been urging tax preparation firms to step up their cybersecurity efforts this year, warning that identity thieves and hackers increasingly are targeting certified public accountants (CPAs) in a bid to siphon oodles of sensitive personal and financial data on taxpayers. This is the story of a CPA in New Jersey whose compromise by malware led to identity theft and phony tax refund requests filed on behalf of his clients.

San Diego Sues Experian Over ID Theft Service

March 23, 2018

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The City of San Diego, Calif. is suing big three consumer credit bureau Experian, alleging that a data breach first reported by KrebsOnSecurity in 2013 affected more than a quarter-million people in San Diego but that Experian never alerted affected consumers as required under California law.

The lawsuit, filed by San Diego city attorney Mara Elliott, concerns a data breach at an Experian subsidiary that lasted for nine months ending in 2013. As first reported here in October 2013, a Vietnamese man named Hieu Minh Ngo ran an identity theft service online and gained access to sensitive consumer data held by Experian’s subsidiary by posing as a licensed private investigator.

IRS Scam Leverages Hacked Tax Preparers, Client Bank Accounts

February 19, 2018

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Identity thieves who specialize in tax refund fraud have been busy of late hacking online accounts at multiple tax preparation firms, using them to file phony refund requests. Once the Internal Revenue Service processes the return and deposits money into bank accounts of the hacked firms’ clients, the crooks contact those clients posing as a collection agency and demand that the money be “returned.”

In one version of the scam, criminals are pretending to be debt collection agency officials acting on behalf of the IRS. They’ll call taxpayers who’ve had fraudulent tax refunds deposited into their bank accounts, claim the refund was deposited in error, and threaten recipients with criminal charges if they fail to forward the money to the collection agency.

This is exactly what happened to a number of customers at a half dozen banks in Oklahoma earlier this month. Elaine Dodd, executive vice president of the fraud division at the Oklahoma Bankers Association, said many financial institutions in the Oklahoma City area had “a good number of customers” who had large sums deposited into their bank accounts at the same time.