Tax Scams & Identity Theft: Protecting Yourself This Tax Season & Beyond
Tax season isn't just stressful - it's also open season for scammers. Whether it's a fake IRS call threatening arrest or a fraudulent refund filed in your name, tax scams are evolving fast. With personal data more exposed than ever, identity theft tied to taxes is a growing concern.
Here's what you need to know to spot tax fraud, stay ahead of scammers, and protect your identity year-round.
Why Are Tax Scams So Common?
Scammers capitalize on tax season because it gives them a timely excuse to impersonate the IRS, pressure people into quick action, and steal sensitive information. Tax returns contain everything identity thieves want - Social Security numbers, addresses, income info, and bank details - making them a goldmine for fraudsters.
Common Tax Scams to Watch Out For
1. Fake IRS Phone Calls
You may get a call from someone claiming to be from the IRS, threatening jail time or demanding immediate payment by gift card or wire transfer.
Red flag: The IRS never initiates contact by phone for debts or legal threats.
2. Phishing Emails and Texts
These messages look official but are designed to trick you into clicking links or sharing your login info.
Tip: Always check the sender's email address - the IRS doesn't use Gmail or generic domains.
3. Fraudulent Tax Preparers
Some scammers pose as legitimate tax pros to steal your refund or file fake returns on your behalf.
Tip: Use IRS.gov to verify preparer credentials and always review your return before signing.
4. Identity Theft via W-2 or 1099 Theft
Scammers intercept or fraudulently obtain wage documents and file taxes before you do, claiming your refund.
Tip: File early, use secure digital storage, and check your IRS account for suspicious activity.
What the IRS Will Never Do
- Call to demand immediate payment or threaten arrest
- Request payment via prepaid debit cards, gift cards, or wire transfers
- Ask for sensitive information via email, text, or social media
- Leave urgent voicemails without prior written communication
Always start at IRS.gov when in doubt.
How to Protect Yourself from Tax Fraud
- File early: Beat scammers to it.
- Use strong, unique passwords: Especially for financial and tax-related accounts.
- Enable two-factor authentication: For email and tax portals.
- Shred old documents: Don't toss anything with SSNs or financial details in the trash.
- Monitor your IRS transcript: Create an account on IRS.gov and regularly check for unexpected activity.
What to Do If You Suspect a Tax Scam or Identity Theft
- Report phishing attempts to phishing@irs.gov
- Forward scam texts to 7726 (SPAM)
- Submit Form 14039 (Identity Theft Affidavit) if you believe someone filed taxes in your name
- Contact the IRS Identity Protection Specialized Unit: 1-800-908-4490
FAQs: How to Spot & Avoid Tax Scams
Q1: What should I do if I get a suspicious call from someone claiming to be the IRS?
A: Hang up. The IRS will never demand immediate payment or threaten arrest over the phone. If you're unsure, call the IRS directly at 1-800-829-1040.
Q2: How can I tell if a tax preparer is legitimate?
A: Look for a valid Preparer Tax Identification Number (PTIN), check reviews, and verify their listing on the IRS Directory of Federal Tax Return Preparers.
Q3: Can someone really file taxes in my name?
A: Yes - if scammers get your SSN and personal info, they can file a fraudulent return. File early and check your IRS account online to spot any suspicious activity.
Q4: What are signs of tax identity theft?
A: Receiving a notice that a return has already been filed, unexpected IRS mail, or being unable to e-file your return.
Q5: Is it safer to file my taxes online or by mail?
A: E-filing through secure, IRS-authorized software is typically safer and faster - with less chance of your documents being lost or intercepted.
