Tax season is prime hunting time for scammers. While the filing deadline may have come and gone, tax scams are as active as ever. As taxpayers wait for their refunds, they should keep their guard up.
It’s easy to see why these scams are so common. Taxes are complicated, involve a lot of sensitive information, and carry hefty consequences. That mix of risks and the added concern that tax sites may make financial data more accessible than users might expect makes for a dangerous combination.
Thankfully, tax scams are fairly easy to spot. Here are some common ones to look out for.
1. Unclaimed Refund Scams
One of the most common tax scams — especially after the filing deadline — involves unclaimed refunds. In these attacks, cybercriminals pose as the IRS and message people that their refund is ready to claim. Once users click the provided link to get their check, they’ll accidentally install malware or give away sensitive information.
These scams are so widespread that the FTC has issued a warning about them ahead of tax season. There’s an easy way to recognize them, though. The IRS will never reach out about a refund via email, text, or social media, so any supposed IRS message that does is a scam.
The IRS issues refunds in just two ways — direct deposit and checks in the mail. Don’t trust anything talking about a refund that’s not one of those methods, regardless of how legitimate it seems.
2. Outstanding Debt Scams
Outstanding tax debt scams are similar. Like in unclaimed refund cases, these attacks see scammers posing as the IRS. Instead of promising to give users a refund, though, they tell them they owe money and must follow a link to make a payment or dispute it.
Americans owed more than $120 billion from delinquent taxes and penalties in 2022 alone, so a warning like this may not immediately appear odd. However, remember the IRS won’t reach out through email, text, social media, or phone calls. Requests for payments through tools like Venmo or Zelle are also red flags.
3. Refund Recalculation Scams
Some tax scams try to sound less urgent in hopes that it will make them more believable. That’s the case with refund recalculation scams, where IRS impersonators say they’ve recalculated someone’s taxes and need further review or authorization.
These messages often say the user will get a bigger refund or owe money after the recalculation. They’ll then provide a link to a form or ask for details like the user’s Social Security number, address, or bank account info. Actual IRS agents have noticed these scams often target college students or staff members.
The IRS does review and correct some returns, but it won’t ask people to fill out forms like this, especially through email. They’ll send checks or paper forms for payment through the postal service.
4. Tax Fraud Scams
A similar but more urgent type of scam will tell taxpayers the IRS is investigating them for tax evasion or other fraud. The weight of that issue can make it easier to fall for these schemes. That’s especially true for businesses outsourcing their taxes to CPAs, who often have limited capacity, potentially making them more likely to make errors.
Like in other scams, these messages will ask users to follow a link to learn more, pay an outstanding debt or give away personal information. They also often threaten legal action to amp up the urgency. Some even provide fake badge numbers to seem more authentic. However, it’s almost certainly a scam if it comes through anything but the mail.
5. Identity Theft Scams
While some tax fraud scams make people think they’ve committed a crime, others convince them they’ve become victims. Some taxpayers have received calls or messages telling them someone has stolen their identity. The scammer then offers a solution that involves giving away personal details or buying gift cards.
To be clear, the IRS will never ask for anything involving gift cards or similar payment forms. People worried about identity theft can watch for a few common warning signs and review their free credit reports.
6. IRS Account Scams
IRS account-related scams are becoming more common as people use digital tools to handle their taxes. They typically involve scammers providing a link to follow to set up an account, only to steal sensitive data like Social Security numbers.
The easiest way to avoid this tax scam is to set up an online account directly on the IRS’s website. Don’t follow any unsolicited links to get to the setup menu. Once taxpayers set up an account, they should go directly to it to handle any account-related issues instead of following links in an email or text.
General Tips for Spotting Tax Scams
Over time, some of these tax scams may become more or less popular, and new ones will emerge. While it’s good to keep up with these trends as much as possible, no one can predict every kind of fraud out there. After all, new phishing scams appear every minute, but a few best practices can help taxpayers spot them.
The most important thing to remember is that the IRS will never ask for information or action over email, text, social media or phone. No matter how official it looks, anything that does is a scam.
Never click unsolicited links or give away sensitive information over email or text. Taxpayers worried about outstanding debts or refunds can check on them through their online IRS accounts. Similarly, users find all official IRS forms on their website. Any tax document that doesn’t appear there is not a real tax form and is a scam.
Be suspicious about anything that sounds too good to be true or is overly urgent. The IRS won’t make threats or demand immediate payment. It also does not accept gift cards or payment apps or ask for credit card information over the phone.
Stay Safe From Tax Scams
Scams are a year-round threat, but tax-related ones are particularly prominent around this time of year. Regardless of what month it is, it’s good to know what’s out there and how to stay safe. As common as these threats may be, taxpayers can easily avoid them when they know what to look for.