Increased tax fraud prompts changes at Colorado Department of Revenue

After a major spike in fraudulent activity, the state may be sending your tax return in the form of a check, instead of a direct deposit.

“The level of suspicious activity is greater than we’ve seen in the past, but it shouldn’t make people think the entire system is under attack,” said John Vecchiarelli, senior director of taxation with the Colorado Department of Revenue.

Vecchiarelli said it’s more fraudulent activity than the department has seen in years.

“We received phone calls from taxpayers saying they had logged into their account and were told that their return had already been filed,” Vecchiarelli said.

“The hackers can get into your online software that you used last year and file your taxes for you. Then they have it go to their direct deposit bank,” said Kathy Bylkas, a local tax expert with Your TaxLady in Colorado Springs.

To help fight fraud, the state is sending certain taxpayers paper checks instead of the normal direct deposit; ensuring that the money gets into the right hands.

“I can assure the public that our systems have not been compromised these are individual fishing or hacking efforts,” said Vecchiarelli.

“A lot of people that file online have been compromised. These year it was more important to get a professional to do it,” Bylkas said.

The state won’t say how many people have been compromised.

The department calls the change a “major undertaking.”

“There are some people who have already spent the money before they got it. Those are the ones that this is going to hurt. The longer you wait, the more chance that someone has already gotten in there and taken your money, so file early,” said Bylkas.

If you receive a paper check that you didn’t expect, you’re asked to call the fraud hotline number that will be attached to your tax return.