For many individuals, the tax season involves locating documents, completing forms, and hoping for a refund. However, while you’re focused on submitting your returns on time, scammers and identity thieves are actively attempting to pilfer your valuable personal information.
During tax season, a significant amount of sensitive personal and financial data is shared online, creating an opportunity for cybercriminals to steal your confidential information, identity, and finances. As per the IRS, nearly 300,000 instances of identity theft were reported in 2024, resulting in $5.5 billion in tax fraud. That’s why annually, the IRS publishes its list of Dirty Dozen Tax Scams. Below are some of the leading schemes you should be cautious about during this tax season.
Common tax deceits to be wary of in 2025
- IRS Impersonation: The most prevalent form of tax fraud usually commences with a phone call, text message, or email. The perpetrator pretends to be from the IRS and asserts that you owe back taxes. They insist on immediate payment, leveraging threats of arrest, suspension of business or driver’s license, or deportation. These scams frequently target susceptible individuals like the elderly or immigrants, capitalizing on the anxiety and uncertainty many people experience concerning tax returns. You can easily dodge these scams by remembering this crucial advice – the initial contact from the IRS will always be through U.S. mail exclusively, never via phone, text, or email!
- Deceptive emails and text messages: Phishing schemes can occur through emails, text messages, or social networking platforms. Scammers send these messages to deceive you into divulging sensitive information like W-2 forms, usernames, passwords, and account specifics. They might promise significant refunds or issue threats of penalties. Refrain from clicking on links or opening attachments in unsolicited messages as they could contain malicious software. You can learn how to report potential phishing here.
- Impostors posing as Tax Preparers: Ghost tax return preparers masquerade as tax professionals despite lacking certification. They might pledge substantial or swift refunds to secure your business. Impersonators often complete your tax return but refuse to sign it or include their IRS Preparer Tax Identification Number (PTIN), which is obligatory by law. At times, they simply file a fraudulent return and abscond with your money, leaving you accountable for any erroneous information and penalties.
- Refund fraud due to identity theft: Fraudsters utilize your stolen data to submit a deceitful electronic tax return in your name. They collect a refund, and you may not even realize you’ve been victimized until your own return gets rejected. The optimal approach to evade tax refund fraud is to file your return promptly. If a criminal files ahead of you, regaining your refund might become a protracted and arduous process.
Indications of potential tax scams
- Unanticipated communications purportedly from IRS: The IRS will never request sensitive information or payment via email, phone, text, or social media.
- Insistence on immediate payment: The IRS will never demand immediate payment – you will always have the chance to challenge a tax debt.
- Threats of legal repercussions or arrest: The IRS will not intimidate you with legal action or deportation.
- Requests for atypical payment methods: The IRS doesn’t mandate particular payment methods, including in-person payments, prepaid debit cards, or gift cards.
- Guarantees of unusually substantial refunds: Exercise caution if someone pledges you an exceptionally large refund. You might be coerced into submitting a deceitful return and bear the burden of any false claims.
Guard yourself with these measures
- Validate tax preparer qualifications: Always engage a reputable tax preparer to handle your return.
- Adopt secure filing techniques: Check out tips on how to safely file your tax return.
- Safeguard personal information: Treat your personal information akin to sensitive files. Avoid carrying your Social Security card and safeguard your tax records and other confidential data.
- Report questionable activities: Report any suspected tax fraud here.
- Familiarize yourself with IRS communication norms: Physical mail serves as the IRS’s preferred mode of communication. Always authenticate the legitimacy of any IRS correspondence.
- Deploy antivirus protection for all your personal data: Webroot solutions offer defense against tax-related phishing scams, as well as viruses and malware aimed at purloining your private information.
- Utilize identity protection: Opt for Webroot Premium and Webroot Total Protection for comprehensive device and identity protection that shields your valuable data against scammers throughout the year. A singular subscription can safeguard your entire digital existence with features like dark web monitoring, swift alerts concerning fraudulent activities, 24/7 customer support, and $1 million reimbursement for stolen funds and other identity theft-related expenses.
- Backup your tax records: Generate digital and hard copies of your tax documents. Store electronic replicas in an encrypted cloud service and retain printed copies in a secure location. Consider leveraging Carbonite for this purpose. It encrypts your tax documents and all other data in the cloud, providing continuous backups and limitless storage.
Steps to undertake if you’ve fallen prey to tax fraud
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