Common Tax Fraud Scams and How to Avoid Them

Tax season can be a stressful time, but for scammers, it’s an opportunity to prey on unsuspecting individuals. Tax fraud scams are becoming increasingly sophisticated, and falling victim can lead to financial loss and identity theft. Fortunately, by understanding the common scams and learning how to protect yourself, you can keep your information and finances safe. Here's what you need to know.

1. Phishing Emails

One of the most common tax fraud scams involves phishing emails. Scammers pose as the IRS or other trusted organizations and send emails designed to trick you into providing personal or financial information. These emails may include official-looking logos and urgent language, such as “Act Now to Avoid Penalties!” or “Verify Your Information Immediately.”

How to Avoid It:

• Remember, the IRS does not initiate contact via email, text, or social media to request personal information.
• Do not click on links or download attachments from unknown sources.
• If you receive a suspicious email, forward it to This email address is being protected from spambots. You need JavaScript enabled to view it. and delete it immediately.

2. Fake Phone Calls

Scammers may call claiming to be IRS agents, using high-pressure tactics to demand immediate payment for unpaid taxes. They often threaten arrest, deportation, or license suspension if you don’t comply. These calls can be convincing, as scammers often spoof caller ID to make it look like the call is coming from the IRS.

How to Avoid It:

• Know that the IRS will never call to demand immediate payment or threaten legal action without first sending a written notice.
• Hang up immediately if you suspect a scam.
• Report suspicious calls to the Treasury Inspector General for Tax Administration (TIGTA) at 1-800-366-4484.

3. Tax Preparer Fraud

Not all tax preparers are trustworthy. Some may commit fraud by inflating deductions, claiming credits you’re not eligible for, or stealing your refund. Others may advertise “guaranteed” high refunds to lure in victims.

How to Avoid It:

• Choose a tax preparer carefully. Verify their credentials and check reviews or references.
• Avoid preparers who base their fees on a percentage of your refund.
• Always review your tax return before signing and ensure the preparer includes their Preparer Tax Identification Number (PTIN).

4. Identity Theft

Tax-related identity theft occurs when someone uses your personal information, such as your Social Security number, to file a fraudulent tax return and claim a refund. Victims often discover the fraud when their legitimate tax return is rejected.

How to Avoid It:

• File your taxes early to reduce the window of opportunity for scammers.
• Use strong passwords and enable two-factor authentication for online accounts.
• Protect your Social Security number and avoid carrying your card in your wallet.
• Monitor your credit and consider placing a fraud alert or credit freeze if you suspect identity theft.

5. “Ghost” Tax Preparers

A “ghost” preparer is someone who prepares your tax return but refuses to sign it. These scammers often promise low fees and quick refunds but may include false information to inflate your refund. Since they don’t sign the return, you’re left responsible for any errors or fraud.

How to Avoid It:

• Ensure your tax preparer signs and includes their PTIN on your return.
• Ask for a copy of your completed tax return for your records.
• Avoid preparers who pressure you to lie or omit income.

6. Social Media Scams

Scammers may use social media platforms to advertise bogus schemes, such as “secret” ways to get additional refunds or falsified forms to claim nonexistent credits. They often use fake profiles or hacked accounts to appear legitimate.

How to Avoid It:

• Be skeptical of tax-related offers or advice on social media, especially from unverified sources.
• Do not share personal or financial information through social media channels.
• Verify any tax tips with trusted sources, such as IRS.gov or a qualified tax professional.

Key Tips to Stay Safe

• Educate Yourself: The more you know about common scams, the better equipped you are to spot and avoid them.
• Secure Your Information: Keep personal and financial information private and stored securely.
• Stay Alert: Be cautious of unsolicited communications, high-pressure tactics, and deals that seem too good to be true.
• Verify and Report: Always verify the legitimacy of tax-related communications and report scams to the appropriate authorities.

Tax season doesn’t have to be scary. By staying informed and vigilant, you can protect yourself from tax fraud scams and ensure a smooth filing process. Remember, if something doesn’t feel right, trust your instincts and take steps to verify the information before taking action.