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
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.