Tax Season Is Open Season for Scammers
Every year, millions of Americans file their taxes expecting a refund, peace of mind, or both. But unfortunately, tax season is also open season for fraudsters and scammers looking to steal identities, file fraudulent returns, and siphon off your hard-earned money. According to the Federal Trade Commission (FTC), tax-related identity theft consistently ranks among the top categories of fraud complaints.
With scammers becoming increasingly sophisticated, it’s critical for taxpayers to stay informed and take action. This guide outlines how to protect against tax fraud — including the most common scams, prevention strategies, and recovery steps if you suspect you’ve been targeted.
What Is Tax Fraud?
Tax fraud is a deliberate attempt to deceive the government by falsifying tax documents, using someone else’s identity, or claiming deductions and credits illegally. But when most people think of tax fraud today, they’re worried about tax identity theft — when someone uses your Social Security number (SSN) or other personal information to file a fake return and steal your refund.
Common Tax Scams Americans Should Watch Out For
1. Phishing Emails and Text Messages
Scammers send messages that appear to come from the IRS or tax software companies. These emails often include fake links designed to steal your personal or financial information.
➡️ Protect yourself: The IRS will never contact you via email, text, or social media to request personal or financial information.
2. Phone Call Scams (Impersonation)
Fraudsters pose as IRS agents and threaten legal action, arrest, or deportation unless you pay immediately via gift card, wire transfer, or cryptocurrency.
➡️ Protect yourself: The IRS never demands immediate payment, and they won’t threaten to call the police or immigration officers.
3. Fake Tax Preparer Scams
Some tax preparers promise big refunds or charge fees based on a percentage of your refund. Others may file false returns in your name and pocket your refund.
➡️ Protect yourself: Use a verified tax preparer listed in the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications.
4. Identity Theft and Stolen Tax Refunds
If a scammer gets your SSN, they can file a return before you do and redirect your refund to their account.
➡️ Protect yourself: File early and monitor your IRS account for suspicious activity.
How to Protect Yourself from Tax Fraud
1. File Your Tax Return Early
The earlier you file, the less time a fraudster has to file using your identity.
“One of the best defenses against refund fraud is filing before the criminals do,” says IRS Commissioner Danny Werfel.
2. Create an IRS.gov Account
Visit IRS.gov and set up an online account to monitor your tax history and view any filed returns, payment activity, or changes.
3. Use Strong Passwords and Two-Factor Authentication (2FA)
All tax software and financial services accounts should use unique, complex passwords and 2FA to add an extra layer of protection.
4. Secure Your Documents and Devices
- Shred old tax documents before disposal.
- Store paperwork in locked drawers or safes.
- Keep antivirus software and firewalls updated.
5. Beware of Public Wi-Fi
Avoid filing taxes or accessing financial data over public Wi-Fi. If necessary, use a virtual private network (VPN) for encryption.
Choosing a Trusted Tax Preparer
If you’re hiring a professional, follow these tips:
- Verify their Preparer Tax Identification Number (PTIN).
- Avoid those who base their fee on a percentage of your refund.
- Ask if they offer IRS e-file.
- Read reviews or check credentials via irs.gov/tax-professionals.
How to Know If You’ve Been a Victim
You may have experienced tax fraud if:
- You can’t e-file because a return was already submitted in your name.
- You receive a tax transcript or IRS notice you didn’t request.
- The IRS notifies you of wages from an employer you never worked for.
What to Do If You’re a Victim of Tax Fraud
Step 1: File Form 14039 – Identity Theft Affidavit
If you suspect someone used your SSN to file taxes, complete and submit this form to the IRS.
Step 2: Place a Fraud Alert on Your Credit Report
Contact one of the major credit bureaus (Equifax, Experian, TransUnion) and request a fraud alert or credit freeze.
- AnnualCreditReport.com offers free reports from all three bureaus.
Step 3: Report to the FTC
File a complaint with the Federal Trade Commission at IdentityTheft.gov, which will generate a personal recovery plan.
Step 4: Alert the IRS and Respond to Notices
Always respond to IRS letters promptly, even if you believe them to be in error. Use the IRS Identity Protection Specialized Unit at 1-800-908-4490.
How the IRS Is Fighting Back
The IRS has stepped up its defenses against fraud, including:
- Requiring Identity Protection PINs (IP PINs) — a 6-digit code only you and the IRS know.
- Improving fraud detection algorithms.
- Working with tax professionals and software companies to share threat data.
Learn more or request an IP PIN here: irs.gov/identity-theft-fraud-scams
Actionable Tax Fraud Prevention Checklist
✅ File your taxes early
✅ Create and monitor your IRS.gov account
✅ Use only verified tax preparers
✅ Never share personal info via phone or email
✅ Shred sensitive documents
✅ Use strong passwords and enable 2FA
✅ Check your credit report regularly
✅ Sign up for an IRS IP PIN
✅ Report any suspicious activity immediately
Vigilance Is Your Best Defense
Tax fraud isn’t just a seasonal threat — it’s a year-round concern. But by staying informed, filing early, and securing your personal data, you can dramatically reduce your risk.
As cybercrime continues to evolve, so must our personal defenses. Share this guide with family and friends to help them stay protected this tax season and beyond.
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