Top Tax Season Scams

On March 21, 2023, the Internal Revenue Service (IRS) published a warning to taxpayers to watch out for scammers using email or text messages. With the tax deadline of April 18 approaching, scammers are hard at work tricking taxpayers.

IRS Commissioner Danny Werfel noted, "Email and text scams are relentless, and scammers frequently use tax season as a way of tricking people. With people anxious to receive the latest information about a refund or other tax issue, scammers will regularly pose as the IRS, a state tax agency or others in the tax industry in emails and texts. People should be incredibly wary about unexpected messages like this that can be a trap, especially during filing season."

The IRS, state tax agencies and tax software companies all participate in the Security Summit. The Security Summit publishes warnings that are designed to reduce the vulnerability of taxpayers to identity theft. This warning focuses on both email and text frauds.

1. Phishing — Fraudsters will send emails to millions of taxpayers. The fraudster claims to represent the IRS, a state tax organization, a tax preparer or a financial firm. The emails may take many different forms. It may promise a phony tax refund. Another common strategy is to frighten the taxpayer by threatening false criminal charges for tax fraud if there is not an immediate response. All of these tricks are designed to enable scammers to make contact with the victim and obtain personal financial information.
2. Smishing — With the common usage of smartphones, a scammer may send millions of text messages that use similar techniques to their email tricks. The message might state, "Your account has now been put on hold," "Unusual Activity Report" or "Click For Solution." The links take the victim to the fraudster's website and an attempt is made to obtain the financial information of the taxpayer.

Scammers will use your financial information or sell it to other fraudsters who then file tax returns and claim improper tax refunds. The IRS cautions taxpayers that it generally makes an initial contact through regular mail. It states that it "will never initiate contact with taxpayers by email, text or social media regarding a bill or tax refund."

The IRS urges taxpayers to be cautious about clicking on unsolicited emails. A more sophisticated phishing strategy is to send three or four emails. After the relationship has been developed, the scammer sends the victim an email with the link that downloads malware.

Many of the latest scams include emails that claim to be from friends or family. A scammer monitors your email account to acquire information and sends an email that appears to be from someone you know. This has been an effective strategy to target both individuals and tax preparers. The final goal is always to obtain your financial information so they can file for a fraudulent refund.

An additional scam is currently popular. The scammer offers to provide "free help" in setting up an IRS Online Account. IRS Commissioner Danny Werfel noted, "Scammers are coming up with new ways all the time to try to steal information from taxpayers. An Online Account at IRS.gov can help taxpayers view important details about their tax situation. But scammers are trying to convince people they need help setting up an account. In reality, no help is needed. This is just a scam to obtain valuable and sensitive tax information that scammers will used to try stealing a refund."

If you are approached by someone who wants to provide help in setting up an IRS Online account at IRS.gov, you should use the IRS website yourself to set up the account. Do not allow a third party to help you set up your IRS Online Account.

If you think you received an email or text from a scammer, you can send the email or a copy of the text to phishing@IRS.gov. You should also include the caller ID, his or her email address or phone number, the date, time, and the number that receives a text message.

There is a "Report Phishing and Online Scams" page at IRS.gov with additional details.