Between gathering documents, figuring out deductions, and making sure everything is done correctly, the last thing you want to worry about during tax season is scammers. Unfortunately, fraudsters ramp up their efforts every tax season, using phone calls, texts, emails, and even fake letters to trick people into handing over personal information or money.
You don’t need to be an expert to spot the most common tax scams. Here’s how to avoid these scams, what to do if you suspect fraud, and how to keep your financial information safe.
6 Common Tax Scams and How to Spot Them
Scams are on the rise, and they often pop up during tax season. Here are some of the more common tax scams you may encounter and how to stay safe.
1. Phishing and Smishing Scams
In a phishing or smishing scam, a fraudster will send you a fake email (phishing) or text message (smishing) pretending to be from the IRS or a tax professional. These messages may claim there’s an issue with your return, a refund waiting for you, or a tax bill that needs immediate payment. Clicking the links in these messages can lead to fake websites that aim to steal your personal and financial information.
Warning Signs:
- Unsolicited emails or texts claiming to be from the IRS.
- Messages urging you to click a link or reply with personal information.
- Bad grammar, generic greetings, or an unusual email address or phone number.
How to Protect Yourself:
- The IRS never sends messages via email, text, or social media.
- Don’t click on links or download attachments in a message you’re unsure about.
- Review the IRS website to confirm the latest phishing or smishing attempts.
2. AI-Generated Scams
Artificial intelligence (AI) can create convincing scams. Fraudsters can use AI to make deepfake phone calls that sound like IRS agents, craft realistic-looking emails, and even forge tax documents. These scams are harder to detect and can trick even more cautious taxpayers.
Warning Signs:
- Callers may say they’re from the government but act aggressively and push for payment.
- Emails that have suspicious links.
- Official-looking tax forms or letters that claim urgent action is needed.
How to Protect Yourself:
- Call the IRS directly to verify any communications sent to you.
- Be skeptical of calls demanding immediate payment or personal emails.
- Cross-check letter or notice information on IRS.gov.
3. Social Security or Medicare Tax Scams
Scammers may call or email you claiming your Social Security or Medicare benefits are at risk due to a tax issue. In these scams, they may claim your benefits could be suspended or that you qualify for a special tax refund if you provide your personal information.
Warning Signs:
- Callers claim to be from the Social Security Administration (SSA) or Medicare and want to discuss your taxes.
- Fraudsters may pressure you or threaten your benefits unless you provide personal details, like your Social Security number.
- You may receive an email promising a special tax refund for retirees only after you pay a fee.
How to Protect Yourself:
- SSA and Medicare will never discuss tax issues over the phone.
- Never share your Social Security Number or Medicare ID.
- Hang up and call the agency directly using the phone numbers listed on their websites.
4. Ghost Tax Preparers
Ghost preparers are scammers posing as tax experts who claim to help you file. They often don’t file returns or purposely fill in information incorrectly, promising a bigger refund using false deductions. Because ghost preparers don’t sign the returns, you’re responsible for any errors or fraud found while they have your personal financial information.
Warning Signs:
- A tax preparer who refuses to provide a Preparer Tax Identification Number (PTIN) or won’t sign your tax returns.
- They take fees based on a percentage of your refund instead of a flat rate.
- Scammers may encourage you to inflate expenses or claim credits you don’t qualify for.
How to Protect Yourself:
- Always use a licensed tax professional with a valid PTIN.
- Review your tax return carefully for errors before filing.
- Avoid preparers who promise large refunds ahead of time.
5. Advance-Fee Tax Refund Scams
These fraudsters promise to get you an expedited refund or special tax credit in exchange for an upfront fee. Then, once you pay them, they disappear, you never receive a refund, and they have your personal information.
Warning Signs:
- A promise to find a hidden refund in exchange for a fee.
- Requests for personal information before processing the refund.
- Claiming the IRS is holding money for you that requires a payment to distribute.
How to Protect Yourself:
- The IRS never charges fees for processing refunds.
- Only use trusted tax preparers with proper credentials and qualifications.
- Never pay upfront fees to receive a tax refund.
6. Social Media Scams
Fraudsters use social media platforms, like Facebook, TikTok, and Instagram, to spread incorrect tax advice, such as special knowledge of secret tax loopholes, and impersonate tax professionals to get you to contact them and provide your information.
Warning Signs:
- Social media posts claiming that you’ll qualify for a bigger refund if you follow their advice.
- Fake IRS or preparer accounts messaging you for personal details.
- Influencers or users with no credentials who offer tax advice or claim big refunds if you follow their directions.
How to Protect Yourself:
- Only take tax advice from licensed professionals and official IRS sources.
- Be skeptical of viral tax hacks, and never share your personal tax information in private messages, comments, or public posts.
- Verify IRS-related social media accounts to ensure you’re getting the right information.
What to Do If You’re Targeted by a Tax Scam
Even the most cautious people can fall victim to fraudsters, and technology makes it easy to create convincing scams, so cybersecurity awareness is more important than ever. If you receive a suspicious message or think you’ve been scammed, here’s how to handle it.
If You Receive a Suspicious Email, Call, or Text
If you receive a message or email claiming to be from the IRS, assume it’s fake until proven otherwise.
- Don’t reply or click links; scammers use them to steal personal information.
- Report phishing emails to the IRS at phishing@irs.gov.
- Block text message scams and forward them to 7726 (SPAM) to alert your phone carrier.
- Hang up any suspicious calls and report them to the Treasury Inspector General for Tax Administration.
If You Paid a Scammer
If you’ve sent money to a fraudster through wire transfer, prepaid debit card, gift card, or cryptocurrency, there may be ways to get it back. However, you need to take action quickly.
- Contact your bank immediately if you paid by debit, credit card, or wire transfer.
- If you used a gift card, contact the gift card company (for example, Apple, Google Pay, or Visa) and report the fraud.
- File a fraud complaint with the Federal Trade Commission.
If You Gave Out Personal Information
If you shared your Social Security number, bank details, or other personal or financial information with a scammer, take action quickly to prevent identity theft.
- Place a fraud alert on your credit file with the three major credit bureaus: Equifax, Experian, and TransUnion.
- Monitor your credit card and bank statements for any suspicious activity.
- Consider freezing your credit to prevent scammers from opening accounts in your name.
Staying Vigilant During Tax Season
Unfortunately, tax scams aren’t going away, but staying informed and knowing how to respond can help you protect yourself from fraud. If something doesn’t seem right, trust your instincts, double-check information, verify sources, and never rush into providing personal or financial information.
By staying one step ahead of scammers, you can navigate tax season with confidence and keep your hard-earned money safe.
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