With tax season fast approaching, experts warn that scammers are ramping up their efforts to defraud taxpayers. From phishing emails to fake tax preparers, fraudsters are finding new ways to exploit the stress and confusion that often accompany filing season.

In 2024, the U.S. Internal Revenue Service (IRS) reported $9.1 billion (€8.7 billion) in financial and tax-related fraud. As scams continue to evolve, taxpayers are urged to remain vigilant and take precautions to protect their personal information and finances.

Common Tax Scams to Watch Out For

1. Fake Refund Offers

One of the most prevalent tax scams involves fraudsters posing as tax professionals and promising substantial refunds. They may ask for an upfront fee or personal details before filing a fraudulent return on the taxpayer’s behalf. Once the scam is detected, the filer—not the scammer—is held responsible.

Taxpayers should be wary of unsolicited emails or messages claiming they are owed a refund, especially if they request personal information or payment. The best approach is to verify directly with the relevant tax authority or rely on trusted tax professionals.

2. Ghost Tax Preparers and Fake Tax Advisors

‘Ghost’ tax preparers file returns without signing them, often inflating numbers to secure bigger refunds. Once their fees are collected, they disappear, leaving the taxpayer responsible for any fraudulent claims. Some even steal refunds and personal information.

Before hiring a tax preparer, individuals should verify their credentials. In the U.S., for example, legitimate tax preparers are registered in the IRS directory and have a Preparer Tax Identification Number (PTIN). Checking online reviews and ensuring preparers sign the return can also help prevent fraud.

3. Fake Charity Scams

Following natural disasters or crises, scammers set up fake charities to solicit donations, falsely promising tax deductions. However, these funds often end up in the fraudsters’ pockets.

To avoid falling victim, taxpayers should verify charities using official databases such as the IRS Tax Exempt Organization Search in the U.S. or the National Council for Voluntary Organizations (NCVO) in the U.K. Donations should be made through official channels, avoiding cash or gift card requests.

4. Smishing and Phishing Scams

Fraudsters often send fake text messages (smishing) or emails (phishing) claiming to be from tax authorities, urging recipients to verify personal information or fix errors on their return. Clicking on these links can lead to identity theft and financial fraud.

To stay safe, taxpayers should avoid clicking on suspicious links, never share sensitive information via email or text, and report any suspected scams to the relevant authorities.

5. Fake Tax Debt Collection

A growing scam involves fraudsters calling taxpayers and falsely claiming they owe back taxes. Using scare tactics, they threaten arrest, deportation, or asset seizure unless immediate payment is made.

To protect against these scams, individuals should familiarize themselves with how tax authorities communicate. For example, the IRS typically sends written notices before any phone contact. If uncertain, taxpayers should hang up and call the tax office directly to verify any claims.

Social Media and Online Scams Targeting Taxpayers

Scammers have increasingly turned to social media, promoting so-called tax ‘hacks’ that promise large refunds with minimal effort. These often involve fraudulent claims that can lead to legal trouble.

Additionally, fraudsters target non-English speakers and seniors, using intimidation and language barriers to steal personal information. Raising awareness and educating vulnerable groups can help prevent such scams.

Debt Relief and Tax Shelter Scams

Some scammers claim they can reduce tax debts for a fee, only to disappear once payment is received. Others promote dubious tax shelters, promising to shield assets from taxation—often leading to serious legal consequences.

To avoid these schemes, taxpayers should seek assistance only from accredited tax relief services and consult legitimate tax professionals before engaging in tax-saving strategies.

How to Protect Yourself This Tax Season

Michael Moore, Chief Information Officer at cybersecurity firm Next Perimeter, advises taxpayers to remain cautious:

• File early to prevent fraudsters from filing in your name.
• Use strong passwords and enable two-factor authentication for tax software.
• Verify tax professionals before hiring them.
• Avoid clicking on suspicious links in emails or texts.
• Report scams to tax authorities immediately.

Tax season may be stressful, but staying informed and vigilant can help prevent financial losses and identity theft.