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Comp Blog

Tax-Fraud Season: Credit Unions must Stay Alert for Schemes

By: Danielle Wright

CommentWednesday - February 19, 2014

According to the IRS, tax refund fraud has increased exponentially in the past few years.  It is reported that from 2011 through November 2013, the agency has stopped 14.6 million suspicious returns involving more than $50 billion in fraudulent refunds.

According to an article in the Express (Washington Post free paper), federal authorities acknowledge that the tax fraud schemes are often fueled by corruption among those preparing tax returns, cashing checks or handling people’s personal information. An IRS Special Agent explains in the article that one person finds and steals the identifying information, another prepares the return, and yet another cashes the refund check – each taking a cut of the proceeds.

As always, but particularly during tax season, credit unions must protect their member’s personal information, and stay on top of suspicious activity. We have gotten inquiries about non-members’ tax refund checks going into member’s accounts.  Not only must credit unions note and potentially report such suspicious activity for BSA purposes, you must be on the look-out for members using personal accounts for business purposes, such as a tax return filing business. 

See also Feb.12th Blog post: CUNA Seeks Input from Credit Unions on Tax Refunds and IRS.






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