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Rip-Off Alert: IRS says tax refund fraud costs citizens more than $21 billion

Tax refund fraud has cost the country more than $21 billion, according to the Internal Revenue Service. [SBG]

Tax refund fraud has cost the country more than $21 billion, according to the Internal Revenue Service.

One reason is that it takes so little to file a false return.

Thousands of consumers receive robocalls from con men telling them they needed to call into a number and immediately pay an outstanding tax bill.

"I'm calling regarding the check you lost. She said I'm from IRS,” said fraud victim Abdul Raoos. “I said I'm going to hang up. It's another scam. He said, no, it's not a scam. He said please, please, don't hang up."

Raoos knew to ask specific questions without giving away any personal information.

"Then he gave me the information about the check, so I was confident that it was a legitimate call," he said.

It turns out his tax refund check had been stolen from his Massachusetts mail box and deposited in someone else's bank accounts.

“Somebody was fraudulently filing tax returns in individuals' names and using their personal identifying information without their knowledge or consent,” said U.S. Postal Inspector Emily Fuccillio.

After tracking down the lost checks, inspectors realized it was a tax fraud ring with 400 victims and $2 million in losses.

"They were working together to negotiate these fraudulently filed tax return checks into various bank accounts," Fuccillio said.

Inspectors have simple advice. First, try to file your taxes early. If someone tries to fraudulently get your refund, you claimed it first.

Second, shred all tax documents you no longer need and remember that the IRS does not initiate contact with taxpayers by email, text or social media.

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