Category Archives: Tax Refund Fraud

IRS: 330K Taxpayers Hit by ‘Get Transcript’ Scam

August 17, 2015

The Internal Revenue Service (IRS) disclosed today that identity thieves abused a feature on the agency’s Web site to pull sensitive data on more than 330,000 potential victims as part of a scheme to file fraudulent tax refund requests. The new figure is far larger than the number of Americans the IRS said were potentially impacted when it first acknowledged the vulnerability in May 2015 — two months after KrebsOnSecurity first raised alarms about the weakness.

Firms Could Be Forced to Disgorge Profits from Tax Refund Fraud

June 9, 2015

Last week, KrebsOnSecurity ran an interview with Julie Magee, Alabama’s chief tax administrator, to examine what the states are doing in tandem with the IRS and others to make it harder for ID thieves to commit tax refund fraud — a $6 billion a year problem. Today we’ll hear from John Valentine, chair of Utah’s State Tax Commission, about the challenges his state faced this year, as well as the prospect that tax preparation firms could be forced return to the U.S. Treasury any profits they make from processing fraudulent tax refunds.

States Seek Better Mousetrap to Stop Tax Refund Fraud

June 2, 2015

With the 2014 tax filing season squarely in the rearview mirror, state tax authorities are struggling to incorporate new approaches to identifying and stopping fraudulent tax refund requests, a $6 billion-a-year problem that’s hit many states particularly hard this year. But some states say they are encountering resistance to those efforts on nearly every front, from Uncle Sam to online tax vendors and from the myriad of financial firms that profit handsomely from processing phony tax refunds.

Phony Tax Refunds: A Cash Cow for Everyone

June 2, 2015

When identity thieves filed a phony $7,7700 tax refund request in the name of Joe Garrett, Alabama’s deputy tax commissioner, they didn’t get all of the money they requested. A portion of the cash went to more than a half dozen U.S. companies that each grab a slice of the fraudulent refund, including banks, payment processing firms, tax preparation companies and e-commerce giants.

IRS: Crooks Stole Data on 100K Taxpayers Via ‘Get Transcript’ Feature

May 26, 2015

In March 2015, KrebsOnSecurity broke the news that identity thieves engaged in filing fraudulent tax refund requests with the Internal Revenue Service (IRS) were using the IRS’s own Web site to pull taxpayer data needed to complete the phony requests. Today, IRS Commissioner John Koskinen acknowledged that crooks used this feature to pull sensitive data on more than 100,000 taxpayers this year.

Tax Fraud Advice, Straight from the Scammers

March 25, 2015

Some of the most frank and useful information about how to fight fraud comes directly from the mouths of the crooks themselves. Online cybercrime forums play a critical role here, allowing thieves to compare notes about how to evade new security roadblocks and steer clear of fraud tripwires. Few topics so reliably generate discussion on crime forums around this time of year as tax return fraud, as we’ll see in the conversations highlighted in this post.

Intuit Failed at ‘Know Your Customer’ Basics

March 5, 2015

Intuit, the makers of TurboTax, recently introduced several changes to beef up the security of customer accounts following a spike in tax refund fraud at the state and federal level. Unfortunately, those changes don’t go far enough. Here’s a look at some of the missteps that precipitated this mess, and what the company can do differently going forward.

TurboTax’s Anti-Fraud Efforts Under Scrutiny

February 22, 2015

Two former security employees at Intuit — the makers of the popular tax preparation software and service TurboTax — allege that the company has made millions of dollars knowingly processing state and federal tax refunds filed by cybercriminals. Intuit says it leads the industry in voluntarily reporting suspicious returns, and that ultimately it is up to the Internal Revenue Service to develop industry-wide requirements for tax preparation firms to follow in their collective fight against the multi-billion dollar problem of tax refund fraud.