Tax season is a stressful time for many, and unfortunately, scammers take full advantage of it. Every year, thousands of taxpayers fall victim to fraudsters pretending to be the IRS, offering fake tax relief, or stealing personal information. Knowing the most common tax scams can help you stay protected and ensure that your hard-earned money doesn’t fall into the wrong hands. In this article, we’ll go over some of the most widespread tax scams, how they work, and what you can do to avoid them.
1. IRS Impersonation Scams
One of the most common tax scams involves fraudsters posing as IRS agents. They may contact you via phone, email, or even text, claiming you owe back taxes and demanding immediate payment. These scammers often use fear tactics, such as threatening arrest, deportation, or license suspension if you don’t comply. Some even spoof caller ID to make it look like the IRS is actually calling.
How to Protect Yourself:
- The IRS never calls, emails, or texts taxpayers to demand immediate payment. They always send letters first.
- If you receive a suspicious call, hang up and report it to the Treasury Inspector General for Tax Administration (TIGTA).
- Never give out personal information over the phone unless you are 100% sure of who you’re speaking with.
2. Fake Tax Preparers (“Ghost” Preparers)
During tax season, many people turn to tax professionals for help. Unfortunately, some scammers pose as legitimate tax preparers, promising large refunds or fast processing. These “ghost preparers” often charge high fees, manipulate returns with false deductions, or steal refunds by altering direct deposit information.
How to Protect Yourself:
- Always use a tax preparer who has a Preparer Tax Identification Number (PTIN).
- Verify credentials by checking the IRS Directory of Federal Tax Return Preparers.
- Review your return before signing it, and make sure your refund is going directly to you, not someone else.
3. Phishing Emails & Fake IRS Websites
Scammers send emails that appear to be from the IRS, claiming you have an urgent tax issue or an unclaimed refund. These emails often include links to fake IRS websites designed to steal your personal and financial information.
How to Protect Yourself:
- The IRS does not send unsolicited emails or messages requesting sensitive information.
- Never click on links in suspicious emails. Instead, visit IRS.gov directly.
- Report phishing emails to phishing@irs.gov.
4. Identity Theft & Stolen Tax Refunds
Some scammers steal Social Security numbers and file fraudulent tax returns to claim refunds. Victims often discover this when they try to file their taxes and the IRS rejects their return because one has already been submitted in their name.
How to Protect Yourself:
- File your taxes as early as possible to prevent fraudsters from filing in your name.
- Monitor your tax records by creating an account on IRS.gov.
- Consider using an Identity Protection PIN (IP PIN) from the IRS for extra security.
5. Inflated Refund Scams
Some dishonest tax preparers promise huge refunds by falsifying deductions or credits. While this may seem tempting, if caught, you will be held responsible for repaying the IRS, plus possible penalties.
How to Protect Yourself:
- Be wary of anyone promising a “too good to be true” refund.
- Ensure your tax preparer provides you with a signed copy of your return.
- Remember: You are responsible for your tax return, even if someone else prepares it.
6. Fake “Tax Relief” Companies
Some companies claim they can eliminate tax debt for pennies on the dollar. While the IRS does offer legitimate programs like Offer in Compromise (OIC), many of these firms charge high fees and do little to help.
How to Protect Yourself:
- Work directly with the IRS or consult a qualified tax professional if you need tax relief.
- Avoid any company that demands upfront fees before providing services.
- Research tax relief companies thoroughly before engaging with them.
7. Unclaimed Refund Scams
Scammers may contact you claiming that you have an unclaimed tax refund and request your personal information to “process” it. The goal is to steal your identity or bank details.
How to Protect Yourself:
- Check for any real refunds yourself by visiting IRS.gov/refunds.
- Do not provide personal information to anyone claiming to have an unclaimed refund for you.
8. Fake Unemployment Claims
With the rise of online unemployment benefits, some scammers use stolen identities to file fake unemployment claims. Victims only discover this when they receive a 1099-G tax form for benefits they never applied for.
How to Protect Yourself:
- If you receive a 1099-G for benefits you did not claim, report it to your state unemployment office.
- Monitor your credit report for unusual activity.
Final Thoughts: How to Stay Safe
Tax scams are constantly evolving, and staying informed is your best defense. Here are a few final tips to protect yourself:
✅ File early before scammers can use your information.
✅ Use strong passwords when filing taxes online.
✅ Verify tax preparers before sharing personal information.
✅ Ignore unsolicited calls, texts, or emails claiming to be from the IRS.
✅ Monitor your IRS account to check for suspicious activity.
If you suspect a tax scam, report it to the IRS at phishing@irs.gov or the Treasury Inspector General for Tax Administration (TIGTA).
Stay Safe This Tax Season!
By staying vigilant and informed, you can protect yourself from scams and ensure your tax season goes smoothly. Have you ever encountered a tax scam? Share your experience in the comments below!
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