IRS Warns That Tax Preparer And Refund Scam Is Getting Worse

NEW YORK (CBS NEWS) -  A tax scam aimed at stealing consumer refunds has ballooned, with the IRS reporting that the number of potential victims has soared from a few hundred to "several thousand in just days."

Uncovered in the first week of filing season, the con appears to have started in tax preparers' offices, where infected computers provided access to complete return data on thousands of consumers. The crooks are using the purloined data — including Social Security numbers, dependents data and even bank account information — to file refund claims on behalf of the victimized taxpayers.

The IRS does not know how many taxpayers will ultimately be affected. But in a sign of how seriously it's taking the scam, the agency on Tuesday issued a second notice to tax preparers urging them to notify the agency, the FBI, local police and their clients as soon as they discover a data breach.

"Speed is critical," the agency said in its advisory. "If reported quickly, the IRS can take steps to block fraudulent returns in a preparer's clients' names."

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In:
• Internal Revenue Service
• Tax Returns