Tax season can be a stressful time for many, and unfortunately, it’s also a prime time for scammers looking to take advantage of unsuspecting taxpayers. Identifying how tax scams work and avoiding them is crucial to protecting your personal information and financial well-being.


Tax-Related Identity Theft


Tax scams are becoming increasingly sophisticated. According to the Federal Trade Commission, in 2020 alone, there were over 89,000 reports of tax-related identity theft. This type of scam occurs when someone uses your social security number to file a tax return and claim a fraudulent refund. To avoid falling victim, be cautious about sharing your personal information and always use secure methods to file your taxes. Additionally, consider using an Identity Protection PIN from the IRS, which can add an extra layer of security to your tax filings.


Phishing Emails and Phone Calls


Another prevalent type of tax scam involves phishing emails and/or phone calls. The IRS reports that thousands of taxpayers receive fake emails and phone calls each year, claiming to be from the IRS and demanding immediate payment or threatening legal action. These scammers often use fear tactics to trick individuals into providing personal information or making payments. Remember, the IRS will never initiate contact via email or a phone call to request personal and/or financial information. Always verify the authenticity of any communication by contacting the IRS directly through their official channels.


Tax Preparer Fraud


The IRS estimates that around 60% of taxpayers use a professional tax preparer, making it a prime target for scammers posing as legitimate professionals. The fraudulent preparers may charge inflated fees, promise larger refunds, or even steal your refund. To protect yourself, ensure that your tax preparer has a valid Preparer Tax Identification Number (PTIN) and is reputable. Check for reviews and credentials, and never sign a blank tax return. 

    Being aware of tax scams and taking proactive measures to avoid them is essential for protecting your personal and financial information. Remember to stay informed about the latest scam tactics, verify the authenticity of any communication, and never share sensitive information without proper verification. Navigate this tax season with confidence and peace of mind. If you or someone you know has become victim of tax fraud, contact the IRS, or set up a meeting with a local tax advisor.

Credible Sources:

Report a tax scam or fraud | Internal Revenue Service (irs.gov)

Internal Revenue Service | An official website of the United States government (irs.gov)

Identity Theft Awareness Week starts today | Consumer Advice (ftc.gov)