Tax Scam Alert! Spot, Avoid, and Report Fraud Before It’s Too Late!

Tax scams are becoming increasingly sophisticated, costing taxpayers billions of dollars each year. Fraudsters exploit tax season by impersonating the IRS, sending phishing emails, making fake phone calls, and filing fraudulent tax returns to steal refunds and personal data.

Understanding how these scams work and how to protect yourself is crucial. In this guide, we’ll break down common tax scams, share tips to avoid falling victim, and explain how to report fraud effectively.

Tax Scam Alert

Tax scams are on the rise, but with awareness and caution, you can protect yourself. Always verify IRS communications, secure your personal data, and use reputable tax professionals. If you encounter a scam, report it to the IRS immediately.

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Tax Scam Alert: Common Tax Scams to Watch Out For

Phishing Emails and Text Messages

Scammers send fake IRS emails or text messages claiming you owe taxes, need to verify personal information, or have an issue with your tax refund. These messages often contain links to fraudulent websites designed to steal your Social Security number (SSN) and banking details.

How to Identify Phishing Attempts:

1. The IRS never emails taxpayers first.
2. Suspicious links lead to fake login pages asking for sensitive information.
3. Messages create urgency or threats to pressure you into clicking.

What to Do: If you receive a suspicious email, do not click any links. Forward it to phishing@irs.gov.

Fake IRS Phone Calls

Fraudsters impersonate IRS agents over the phone, demanding immediate payments or threatening arrest, deportation, or license suspension. They often request payments through gift cards, wire transfers, or cryptocurrency—methods the IRS never uses.

How to Recognize a Fake IRS Call:

• The caller demands immediate payment and threatens consequences.
• They refuse to answer questions or provide IRS credentials.
• The caller ID may appear as “IRS” due to caller ID spoofing.

What to Do: Hang up and report the call to TIGTA at irs.gov.

Tax Refund Identity Theft

Scammers use stolen Social Security numbers to file fake tax returns in someone else’s name, claiming fraudulent refunds before the real taxpayer files.

Signs of Tax ID Theft:

1. You receive a letter from the IRS about multiple tax returns filed under your SSN.
2. The IRS notifies you that your refund was already paid, but you never received it.
3. You’re unable to e-file because your SSN has already been used.

What to Do: If you suspect identity theft, visit IRS Identity Theft Central for guidance.

Fake Tax Preparers (“Ghost Preparers”): Some scammers pose as tax professionals, promising large refunds and charging high fees. These “ghost preparers” refuse to sign your tax return, leaving you liable for errors and potential fraud.

Red Flags of Fake Tax Preparers:

1. They do not sign the return or provide a Preparer Tax Identification Number (PTIN).
2. They base their fee on your refund size rather than a flat fee.
3. They file false deductions or credits to increase refunds fraudulently.

What to Do: Always verify a tax preparer’s credentials through the IRS Directory of Tax Preparers.

Fake Check and Refund Scams: Some scams involve fraudulent tax refunds deposited into victims’ bank accounts. Scammers then call, claiming the refund was an IRS mistake and demanding it be returned via wire transfer or gift card.

How the Scam Works:

1. The scammer steals your tax data and files a return in your name.
2. The IRS deposits the fraudulent refund into your actual bank account.
3. A fraudster calls, claiming an error and demanding you return the money.

What to Do: If you receive a suspicious tax refund, do not spend it. Contact the IRS at 1-800-829-1040 for instructions.

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Tax Scam Alert: How to Protect Yourself from Tax Scams

Verify All IRS Communications

1. The IRS does not initiate contact via email, text, or social media.
2. Real IRS notices come by mail first.
3. You can verify legitimate IRS calls by contacting 1-800-829-1040.

Secure Your Personal Information

1. Use strong passwords for online tax accounts.
2. Never share your SSN or banking details over the phone.
3. File taxes early to reduce the risk of identity theft.

Choose a Reputable Tax Preparer

1. Use IRS-verified tax preparers with a valid PTIN.
2. Avoid preparers who guarantee large refunds or refuse to sign returns.
3. Verify credentials using the IRS Tax Preparer Directory.

Be Skeptical of Unsolicited Offers

1. Avoid any unexpected refund notifications or threatening messages.
2. Do not respond to emails asking for personal information.
3. If a deal sounds too good to be true, it probably is.

Tax Scam Alert: How to Report Tax Scams

If you suspect a tax scam, report it to the appropriate authorities:

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Tax Scam Alert (FAQs)