The dirty tricks of tax season: 12 scams that could cost you big
Key Points:
- IT expert explains the 12 biggest scams that target US citizens during tax return season and how to avoid them
- From phantom tax preparers and bogus refund offers to social media ‘hacks’ and fake debt relief, these are the most common tax scams
- Expert explains how to protect yourself from fraud and file your taxes safely
Tax season is already stressful enough—chasing down receipts, deciphering tax forms, and praying for a refund. But while you’re crunching numbers, scammers are working overtime to empty your pockets. In 2024, the IRS revealed that over $9.1 billion had been taken in fraud cases related to tax and financial crimes.
“From fake IRS agents to shady tax preparers, fraudsters have an arsenal of tricks to steal your money and personal info,” says Michael Moore, the Chief Information Officer at Next Perimeter, a leading cloud-first cybersecurity company. Here, Michael explains the most common tax scams to watch out for and how to dodge them like a pro.
1. The Phantom Tax Preparer
These tax preparers aren’t working from beyond the grave – a ‘ghost preparer’ is a scammer who files your taxes but conveniently forgets to sign the return. They might tweak numbers to get you a bigger refund (which lands you in trouble with the IRS) and then vanish once their hefty fee is paid.
How To Avoid The Scam: Only work with tax preparers listed in the IRS directory, and make sure they sign your return with their official Preparer Tax Identification Number (PTIN). Verify their credentials before sharing any personal information.
2. The “You Owe the IRS” Scam
A scammer calls you, posing as an IRS agent, claiming you owe back taxes. If you don’t pay right now, you’ll face immediate arrest, deportation, or asset seizure. “Sounds terrifying, right?” says Michael. “That’s exactly the point.”
How To Avoid The Scam: The IRS never calls demanding immediate payment; they send letters first. If in doubt, hang up and contact the IRS directly using the official number listed on their website.
3. The Too-Good-To-Be-True Refund Offer
Some scammers pose as tax professionals and promise inflated refunds. They’ll ask for a cut upfront, file a bogus return in your name, and leave you dealing with the IRS when the fraud is uncovered.
How To Avoid The Scam: If someone guarantees an unusually high refund, run the other way. Use only trusted tax professionals and review any return before submission.
4. Phishing & Smishing Attacks
Ever get an email or text claiming to be from the IRS, asking you to “verify” your personal information? “This is a scam designed to steal your Social Security number and bank details,” warns Michael.
How To Avoid The Scam: The IRS never initiates contact via email, text, or social media. Ignore and delete these messages. Never click on links or download attachments from unknown sources.
5. Fake IRS Website Scam
Scammers create lookalike IRS websites to trick you into entering sensitive data. They’ll even send links that appear to come from a government email.
How To Avoid The Scam: “Always type www.irs.gov directly into your browser instead of clicking on links in emails,” says Michael. “Verify any IRS correspondence by contacting them directly.”
6. Bogus Charity Scams
Fraudsters set up fake charities (often after a disaster) and pressure you to “donate,” often with some intimation that you’ll get a tax break as a result. But instead of helping others, you’re just lining their pockets.
How To Avoid The Scam: Verify charities through the IRS Tax Exempt Organisation Search before donating. Be wary of charities that request donations in cash or gift cards.
7. Social Media Tax Hoaxes
“TikTok and Facebook are flooded with viral tax “hacks” promising huge refunds with minimal effort,” says Michael. “However, these so-called hacks often involve shady tax credits or outright fraud.”
How To Avoid The Scam: If a tax “hack” isn’t from a legitimate tax professional, assume it’s a scam. Research any tax advice before acting on it.
8. Fake Taxpayer Assistance
Scammers pose as IRS agents or tax advisors offering to help you create an online IRS account. Once they do, they steal your refund and personal info.
How To Avoid The Scam: Set up your IRS account yourself at irs.gov. Never share your login credentials or allow someone else to create your account on your behalf.
9. The Identity Theft Tax Nightmare
You sit down to file your taxes, and—surprise!—someone else already filed in your name and claimed your refund. “This type of tax-related identity theft can take months to resolve, so it’s crucial to avoid it,” says Michael.
How To Avoid The Scam: File early and sign up for the IRS Identity Protection PIN (IP PIN) to block unauthorised filings. Monitor your credit reports and IRS account activity regularly.
10. The Fake Debt Relief Service
Some scammers promise to help you settle tax debt for pennies on the dollar—after you pay them a hefty fee, of course. “In reality, they take your money and vanish,” says Michael.
How To Avoid The Scam: Only use IRS-approved tax relief services. The IRS offers real debt relief programs without upfront fees. Be cautious of unsolicited offers; they’re usually fake.
11. The Trust & Tax Shelter Scam
Fraudsters will claim moving your assets into a “special” trust will eliminate your tax burden. Spoiler alert: it won’t, and you could face legal trouble.
How To Avoid The Scam: Consult a legitimate tax professional before entering into any tax scheme, and avoid tax schemes promoted by unfamiliar financial advisors.
12. Senior & Non-English Speaker Scams
Fraudsters specifically target retirees and non-English speakers, using aggressive tactics and language barriers to trick them into handing over money or information. “They might use any of the tactics outlined above, relying on intimidation tactics and misunderstandings to get what they want,” says Michael.
How To Avoid The Scam: Spread the word—help your elderly relatives and non-English-speaking friends spot scams before they fall victim.
Michael Moore, Chief Information Officer at Next Perimeter, commented:
“During tax season, scammers know people are stressed, rushing to file, and more likely to fall for a well-timed trick. The best way to protect yourself? Slow down and stay skeptical. The IRS isn’t going to call you demanding immediate payment, and they definitely won’t text you a link to ‘fix an error’ on your return. If someone is pressuring you to act fast, that’s your cue to step back and verify before doing anything.
“File early if you can—that way, if someone tries to file in your name, they’ll hit a dead end. Use strong passwords for tax software, enable two-factor authentication, and use an IRS Identity Protection PIN for an extra layer of security.
“If you’re working with a tax preparer, don’t just go with whoever promises the biggest refund. Check their credentials, ask questions, and make sure they sign your return—ghost preparers love to disappear when trouble arises.”