Tax Scams: How to Recognize & Avoid Fraud This Tax Season

With 2025 tax season in full effect, scammers are ready to steal taxpayers’ personal and financial information in many new ways. Unfortunately, technology has allowed scammers to become more sophisticated than ever before. Tax scams now come in many different forms, from using artificial intelligence (AI) to make highly convincing phishing emails and messages, to posing as tax professionals on social media who offer expedited tax filing services. One thing these scams all have in common is that they prey on fear and urgency.

Being able to recognize the warning signs of a scam will help taxpayers safeguard their identities and finances from scammers this tax season.

Recognizing Tax Scams & Fraud

Scammers frequently try to impersonate the Internal Revenue Service (IRS) to mislead taxpayers about tax refunds, credits and payments. There are three major tax scam warning signs to look out for:

1. A big pay day – Scammers use social media to give bad tax advice and can convince taxpayers to lie on their tax forms or mislead them to believe they qualify for certain tax credits.
2. Demands or threats – A big red flag is a demand for immediate payment. Impersonators often use this tactic to instill fear. Along with demands, scammers may also utilize threats to instill fear, such as threats of arrest or deportation.
3. Malicious website links – Always check hyperlinks before clicking on them. Odd or misspelled web links can direct taxpayers to harmful websites instead of trusted, secure websites like IRS.gov.

A good rule of thumb is that if a tax-related offer sounds too good to be true, it probably is and should be questioned as a potential tax scam. 

Common Tax Scams in 2025

There are many common tax scams that go on from year to year, as well as brand new scams that emerge each year with growing technology. It is important to keep up to date with all the latest scams and be vigilant before giving anyone your personal information. According to the IRS, these are some of the most common tax scams in 2025:

• Charity impersonators – This scam tries to trick taxpayers into donating to a fake charity on a bogus website, by suggesting taxpayers may receive a tax deduction for their donation.
• Credit and refund misinformation – Dishonest tax preparers often misrepresent rules for claiming tax credits, leading taxpayers to falsify their financial information in an attempt to receive larger refunds on credits they don’t realize they are not actually eligible for. This can lead to delayed refunds, audits, fines or even imprisonment for falsifying data on your tax return.
• Disaster fraud –Scammers may impersonate the IRS to “help” taxpayers file casualty loss claims with the promise of receiving a large tax refund.
• Dishonest tax preparers – Some of the markers of a dishonest tax preparer include an individual who will not sign the return, falsifies tax information, puts the refunds into their own bank accountant or requires payment in cash.
• Email and text message impersonators – Scammers may send malicious links and/or attachments that are programmed to steal personal data or damage the taxpayer’’s computers if they are opened.
• Seniors being targeted who are nearing retirement – Scammers often target people over the age of 65 in an attempt to steal their personal and financial information. Many times, they try to trick people nearing retirement to withdraw money from their retirement accounts.
• Social media scams – Social media allows scammers to connect with taxpayers directly and offer bad tax advice that can mislead them about their refund eligibility.
• Tax debt settlement or relief services – Scammers pressure taxpayers to use their services so they can settle the taxes that they owe. They frequently promise to relieve tax debt for “pennies on the dollar.”
• Unclaimed tax refunds –- Scammers impersonate the IRS through the mail and can mislead taxpayers about bogus unclaimed refunds.
• Unemployment identity theft – Scammers can use taxpayers’ information to file fake unemployment claims and direct the payments to themselves, leaving the taxpayer with taxable income to report that they themselves never actually received.
• Unexpected tax bills – Scammers may send taxpayers a fake tax bill to trick them into sending a payment.
• W-2 fraud – Scammers not only target taxpayers, but they also target businesses and payroll companies with malicious email attempts to steal W-2 data via email. When they steal this information, they then file fraudulent returns in others’ names for refunds.

How Does the IRS Contact Taxpayers?

It is important that taxpayers protect themselves from impersonators and know how the IRS would contact them, if necessary. The IRS typically only contacts taxpayers through the mail. If taxpayers receive a letter from the IRS, they can search for it on the IRS.gov website to verify its authenticity. With permission, the IRS may also contact taxpayers through email, text message, phone, fax or an in-person visit, in certain circumstances.

Always remember that the IRS will never:

• Contact taxpayers on social media or ask for payments via social media.
• Accept gift cards or prepaid debit cards as payment.
• Threaten to call law enforcement or immigration officials.
• Revoke citizenship status, driver’s licenses or business licenses.
• Leave pre-recorded voicemails.
• Mail tax debt resolution advertisements.

What Should You Do if You Were Scammed?

If a taxpayer falls victim to monetary or identity theft, they should quickly take steps to protect their finances and tax information. IdentityTheft.gov outlines short-term and long-term steps that taxpayers can take to secure their information. Some key first steps include to:

• Immediately stop interacting with the scammer.
• Cease making any payments.
• Not share any further sensitive personal information (i.e. date of birth, Social Security number etc.)
• Contact your bank or credit union.

Are There Steps Taxpayers Can Take to Prevent Being Scammed?

In addition to securing your personal and financial data, taxpayers can also proactively secure their tax information by securing an Identity Protection Pin (IP PIN) – a six-digit PIN number that is unique to you and is only known by you and the IRS, which prevents scammers from filing a tax return in your name.

Where Should You Report Tax Scams?

If a taxpayer has been subjected to a tax scam, they can report the impersonator to the IRS by emailing phishing@irs.gov. The IRS has outlined instructions on how to report suspicious emails, letters, social media messages, text messages, phone calls or faxes.

It’s important to stay diligent throughout the year on tax scams targeting taxpayers and businesses. Stay up to date on this year’s latest tax scams by reviewing the IRS’s Dirty Dozen list. Remember: never give out personal or financial information unless it is to a trusted tax professional.

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