12 IRS scams to avoid this year

Tax season can be a busy time of the year. And scammers may try to take advantage of the stressors that can come with filing taxes. But knowing about common tax schemes can help you identify them—and make it easier to avoid becoming a victim. 

Here’s what you need to know about common IRS scams and how to stay safe.

Key takeaways

• Criminals might target victims with different types of IRS scams any time of the year.
• Scammers may use tax season to try and steal personal information by posing as the IRS. 
• Potential scams could happen by email, phone, text and beyond.
• Knowing what to expect and how to report suspicious activity can help to stay vigilant.

An IRS scam can involve a criminal claiming to be from the IRS to steal money or information from an individual or business. Throughout the year—but especially during tax season—scammers look for opportunities to steal personal data and information about financial accounts.  

Scammers may try to make contact through any of these channels:

• Regular mail
• Telephone
• Email
• Text message
• Social media channels 

According to the IRS, it doesn’t “initiate contact with taxpayers by email, text messages or social media channels to request personal or financial information.” Each year, the IRS creates a list called the “Dirty Dozen” to warn taxpayers of the most current tax scams.

Here are some common scams to watch out for, according to the IRS:

IRS impersonation scams

• Email phishing: Known as phishing, scammers may ask for personal or financial information from a taxpayer through unsolicited emails. The scammer might provide a malicious link related to a supposed problem with their account. Remember, the IRS says that most of its communication is done through the mail, and it won’t request personal or financial information by email, text or social media.
• IRS scam calls: Through this form of phishing—sometimes called vishing—a scammer makes a call and impersonates the IRS. The number might be “spoofed” to make it look like they’re calling from the IRS or a local sheriff’s department. The scammer then asks the taxpayer to share sensitive information or make a payment. 
• IRS text messages: Another form of phishing is smishing. A taxpayer may receive a text message from a fraudulent number claiming to be the IRS. These texts may have links that look like the IRS’ website or online tools to seem more legitimate. Remember, the IRS says it won’t communicate with taxpayers through text messages. 

Other tax scams

• Tax-related identity theft: This type of crime occurs when a scammer steals personal information from a taxpayer. They use the data, including a taxpayer’s Social Security number (SSN), to file a tax return in a taxpayer’s name. Scammers then claim the tax refund. Taxpayers might not learn about the scam until they try to file their tax return and aren’t able to because someone has already filed a return using their SSN.
• Abusive arrangements: Scammers may reach out and tell filers they can earn tax savings if they take part in a complex scheme or arrangement. These arrangements can be promoted online and oftentimes seem too good to be true. 
• Tax debt settlement companies: Dishonest tax companies might target individuals having trouble paying their taxes. These companies—sometimes called “offer-in-compromise mills”—may claim they can settle the taxpayer’s debt at a large discount. But this agreement can come with a fee. The IRS encourages those having trouble with a pending tax payment to work directly with the IRS for assistance.
• Ghost tax preparers: Sometimes scammers pose as tax preparers and offer to help with tax returns. But they won’t sign the return or include a preparer tax identification number (PTIN), which are both required by law. Known as a ghost tax preparer, this type of thief may promise a large refund and charge more money to prepare the returns. They could steal personal information or a taxpayer’s refund during the process.
• Spear phishing: This type of attack is when scammers send an email trying to steal information—like software preparation credentials—from tax professionals. Then they take client data to file a fraudulent tax return on their behalf and steal their tax refund. 

Additional scams

• Social media attacks: Criminals can use information found on social media to get personal information about a victim. Then they might pretend to be the victim’s family member, friend or co-worker to trick them into sharing personal information. In these messages, the thieves could ask for money or donations. Or the messages may contain malware, which can result in a larger attack.
• Fraudulent unemployment claims: Scammers might also try to steal a taxpayer’s personal information to claim unemployment benefits on their behalf. The taxpayer may not realize it until they get a Form 1099-G from the IRS at tax time to report unemployment compensation. 
• Fake charity requests: Criminals may set up false organizations that claim to help people going through a difficult situation. And then they might ask taxpayers for personal financial information or donations. But these fake charities won’t have an employer identification number (EIN), which is required to verify that a charity exists. 
• Economic impact payment scams: The IRS warns to still be on the lookout for pandemic-related scams, like using identity theft to steal stimulus payments. Even though the IRS says it has already issued all stimulus payments, thieves may still reach out through text messages, phone calls or emails to get bank account information from a taxpayer. 

Knowing what to watch for can be the first step in steering clear of suspicious activity. In addition, recognizing what the IRS typically does and doesn’t do can make it easier to identify tax scams. Here are a few ways to help avoid these schemes: 

• File your taxes early. If you’re able to file taxes before the usual April 15 deadline, you may gain an extra layer of protection against scams. Criminals are less likely to be able to use your personal information to file in your name if the IRS has already received your information. 
• Be wary of texts, emails or social media messages. Use caution when opening unexpected tax-related emails, texts or social media messages, even if they look legitimate. Don’t open or download any attachments, reply or click any links. Contact the IRS directly at 800-829-1040 if you feel there may be an issue. 
• Understand how the IRS operates. Under typical circumstances, the IRS says it generally communicates to taxpayers through the U.S. Postal Service. For this reason, if you receive an unsolicited call, a text message, a social media message or a knock at your door from a person who claims to be from the IRS, don’t provide any information unless you can confirm they’re from the IRS. 
• Do your research. Before working with a tax professional or making a tax-deductible donation, you can carry out a few steps to check for legitimacy. For example, you could ask a tax preparer to show their PTIN or request that a charity send you their EIN so you can confirm their status through the IRS tax-exempt organization search tool.

If you see suspicious activity or think you may have fallen victim to a tax scam, you can report the situation. Here are a few strategies to keep in mind if you think you’ve spotted or have been subjected to a tax scheme:

• Report suspicious messages. If you receive a suspicious email about taxes, you can forward it to phishing@irs.gov. If you’ve clicked on links within the email or entered personal information, you can go to the IRS Identity Theft Central page to report the incident. Information about phony calls can be emailed to phishing@irs.gov with the subject “IRS Phone Scam.” You can also file a complaint. Suspicious text messages can be forwarded to the IRS at 202-552-1226. 
• Identify suspicious tax preparers. If you think a tax professional isn’t following the IRS guidelines, you can report them to the IRS.
• Contact organizations mentioned. If you receive a suspicious email, text or social media message about taxes that claims to be from your bank or financial institution, you should notify that bank or financial institution directly. For suspicious tax activity related specifically to any Capital One accounts, send an email to abuse@capitalone.com. You can also read more about Capital One protections and security.

When tax season rolls around—and all year long—it’s a good idea to be alert to any scammers. Starting the filing process early and being aware of common tax scams can help you avoid being taken advantage of. You’ll know what to expect and may feel confident about spotting anything suspicious. 

Best of all, it can be empowering to feel that you’re protecting both your personal and financial information. As an added precaution, you can learn other ways to protect your personally identifiable information (PII).