Top Scams to Watch Out for This Tax Season

January 13, 2025 at 01:00 AM EST

SPONSORED CONTENT -- (StatePoint) The days of filing paper tax returns are gone, and criminals are taking advantage. With taxpayers managing their sensitive information online, thieves are finding new ways to scam victims. In 2023 alone, the IRS reported $5.5 billion lost to tax fraud schemes. And the increased prevalence of artificial intelligence means tax scams this year will likely be more sophisticated than ever.

Scammers have an arsenal of weapons, but no matter their tactics, the goal is the same – to have you give them money or access to it. Here are scams to look out for this tax season:

Tax avoidance scams. These scams often promise rewards too good to be true. Scammers claim to have specialized knowledge on exploiting loopholes to avoid taxes or maximize returns. High-income filers are heavily targeted through offers of seemingly legitimate annuities or tax shelters.

Refund scams. In this scam, a criminal will claim to be someone official notifying of an unclaimed or incorrectly calculated refund, prompting the victim to share information – and possibly bank account numbers – to claim it.

Violation scams. This is a fear-based scam, where the criminal poses as an IRS official threatening some punitive action, claiming the victim committed a violation and needs to contact them to resolve the situation.

Filing support scams. Similar to tech support scams, criminals offer to help create IRS accounts to assist with the online filing process. Frequently posing as tax preparers, scammers will go through the motions of gathering the victim’s personal information for tax forms they never intend to file.

Social media scams. Social media serves as a great place for criminals to find potential victims and carry out tax scams, fraudulently claiming to offer different types of services or possessing unique knowledge or access.

Recovery scams. Once a victim is scammed, criminals will try to strike again – believing the victim is gullible. Exploiting a time of vulnerability, they’ll contact the victim with promises of helping them recover their losses and will leverage this as an opening to commit additional crimes.

While it is not always easy to pick out a scam, here are indicators to watch for:

• Promise of a big pay-out. If it sounds too good to be true, it probably is.

Request for your account information. The IRS will never ask for your credit or debit account information over the phone.

• Random contact. The IRS contacts taxpayers by mail first and will never contact via random phone calls or digital means. The IRS will not leave prerecorded, urgent, or threatening voicemails.

• Demands or threats. The IRS can’t revoke your driver’s license, business licenses or immigration status and cannot threaten to immediately bring in local law enforcement. Taxpayers are allowed an appeals process, so any message of “now or else” won’t come from an official channel.

• Request for you to click a weblink. Odd or misspelled web links can take you to harmful sites instead of IRS.gov.

The IRS recommends these best practices to protect against tax fraud:

• Get an early start. File early so criminals have less time to impersonate you.

• Set up a verified account. Set up your own IRS account before someone else can and use an Identity Protection PIN – a six-digit number known only to you and the IRS.

• Wait for written notice. Do not respond to any supposed communications from the IRS if you haven’t first received official notification through U.S. mail. If you get a call from someone claiming to be the IRS, hang up and call the official number on the website before engaging. Further, never click a link sent digitally as initial contact.

Apply good cyber hygiene.Do not use public Wi-Fi when filing your tax returns. Do use strong passwords, secured network connections and multi-factor authentication. Run all software updates and keep systems current.

If you fall victim to a tax scam, report it to the IRS. For more scam protection tips, visit PNC’s Security & Privacy Center at pnc.com.

One wrong click can cause tremendous damage that ends up earning bad guys a windfall. However, a little caution can go a long way in helping you avoid a costly tax scam.

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Photo Credit: (c) scyther5 / iStock via Getty Images Plus

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Top Scams to Watch Out for This Tax Season

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