Tax season can come with several headaches, from gathering documents to finding the time to sit down and file. But one pain that you want to avoid is falling for a tax scam.
Year-round, scammers look for ways to trick people into giving them money or personal information. There are several common types of scams during tax season, so people should be on the lookout for red flags, said Amy Nofziger, director of victim support at the AARP Fraud Watch Network.
One of the most common types of scams is related to identity theft. Taxpayers usually know their identity has been stolen when they try to file their tax returns and the IRS says they’ve already done so. This usually means someone else filed in their name in order to receive a refund.
In 2023, the IRS received 294,138 identity theft complaints. The IRS says taxpayers who are victims of tax-related identity theft wait an average of 19 months for the IRS to process their returns and send their refunds.
Here are some expert recommendations to protect yourself from scams during tax season:
Know scammers' tactics
Three common tactics used by scammers are based on fear, urgency and money, said security expert Petros Efstathopoulos. Here's how they work:
Fear
When a scammer contacts you via phone or email, they use language that makes it seem like there is a problem that you need to solve. For example, a scammer contacts you over email telling you that your tax return has an error and if you don’t fix it you’ll get in trouble.
Urgency
Because scammers are good at creating a sense of urgency, people tend to rush, which makes them vulnerable. Scammers often tell people they need to act right away, which can lead to them sharing private information such as their Social Security numbers.
“When people are under pressure and under anxiety, they might do something with the speed that they’re not thinking through it and not doing their research,” Nofziger said.
Money
Scammers use money as bait, Efstathopoulos said. They might impersonate tax professionals or the IRS saying you will get a bigger refund than you expect if you pay them for their services or share your personal information.
Check if it's really the IRS contacting you
It’s very important to know that the IRS never reaches out via unconventional means, said Dr. Zulfikar Ramzan, chief scientist at Aura, a digital security company. The IRS usually contacts taxpayers via physical mail through the U.S. Postal Service.
“Typically, they’re going to ask you to contact them either via their website or by sending correspondence directly to their main address, which is easy to verify,” Ramzan said.
A common impersonation scam is when someone calls you claiming they work for the IRS and demanding an immediate payment, Nofziger said.
You can find out more about how the IRS contacts people here.
Research tax professionals
If you need help from a tax professional, research them to make sure they are not imposters, Nofziger said.
“You’ll see advertisements for low-cost tax preparers that can get you more money than anybody else,” Nofziger said. “They will advertise on social media or set up shops in strip malls.”
To avoid getting scammed by fake tax preparers, Nofziger recommends that you look for reputable lists. Options include the IRS directory of tax professionals and the AARP Foundation tax-aid locator.
Don't pick up if you don't know who is calling
Scammers often reach out by phone and Efstathopoulos recommends that you don’t share information on incoming calls.
“If my bank calls me and says ‘Hi, I need some information’, I say ‘Thank you very much, I’ll call you back on the number I know is yours,’” Efstathopoulos said.
That makes it easier to know for sure that you're not talking to a scammer. As a general rule of thumb, banks don't often call unless there is suspicious activity on your account or if you previously contacted them about a problem with your account.
If you receive many unknown calls that end up being scammers or robocalls, Nofziger recommends using tools available on your phone to block spam. Check here for how to do this on you iPhone and here for Android.
Use all of the technology at your disposal
Filing your taxes early is always recommended in case someone else tries to file for you, Efstathopoulos said. But if that is not an option, you can take other steps that make you less vulnerable to scams. These include using the IRS pin system, having a password manager and checking that your computer doesn’t have a virus.
Identity protection PIN
The IRS offers an identity protection PIN, which is a six-digit number, to protect taxpayers from someone else filing for them. This number helps the IRS verify your identity when you’re filing.
“Every time you see an opportunity to turn on two-factor authentication, take it and make sure it’s turned on,” Efstathopoulos recommended.
Password manager
Efstathopoulos also recommends using a password manager on your devices to ensure you’re utilizing a complex password that scammers can't guess.
Credit report check
Regularly checking your credit report and bank statements is a good practice since it can help you identify if someone has been using your bank account without your knowledge, Ramzan said. If your bank lets you set alerts for big transactions you should take advantage of that extra security measure, he added.
Clean your computer
If you’re filing your tax returns online, you want to make sure your computer is free of viruses, Ramzan said. Even if the tax filing software you’re using is safe, if your computer has a virus, someone could steal your personal information.
Share what you know with loved ones
If you’ve taken all the necessary steps to protect yourself, you might want to help those around you, Nofziger said. Whether you’re helping your grandparents to block unknown callers on their phones or sharing tips with your neighbors, talking with others about how to protect themselves from scams can be very effective.
Scams don't end with tax season
Even when you’ve already filed your taxes, there are other scams that you should keep an eye out for. Scams surrounding refunds and tax corrections are some of the most common.
“We know that wherever the money is, the criminals are going to be there," Nofziger said. "And that includes this time when there is money being sent to people."
