How to Avoid Tax-Season Scams (2024)

With all the hardships of the last year, it's easy to forget that tax season is already upon us. Odds are that between the pandemic and everything else happening in the world, the last thing you need worry about is someone trying to mess with your tax return. Here are some things to watch out for as you get ready to file your taxes.

A Perfect Storm for Scams

Filing your taxes is about money, and money means scammers. People worry about how much they'll have to pay or are salivating at how much they might get back in the form of a tax refund. Scammers like to prey on both of these emotions, sometimes threatening a fake audit or offering a fat payout in exchange for personal information.

Tax season is also advantageous to scammers because the IRS and tax preparers are some of the few people that actually do need your personal information. If a stranger were to ask you for your Social Security number, you would probably say no. But if that person claimed to be with the IRS and wanted to confirm some issues with your taxes, you might be more likely to agree.

Even tax preparers need to be on alert. The IRS recently warned that scammers are trying to get Electronic Filing Identification Numbers, which could be used to file bogus claims and steal tax returns. In a similar vein, taxpayers should be wary of tax preparers that refuse to sign off on the returns they complete.

The Pandemic Factor

The ongoing COVID-19 pandemic has put millions out of work, meaning that many people may have claimed unemployment benefits for the first time. Scam artists are taking advantage of this chaos and the unfamiliarity around government services and claiming fraudulent unemployment benefits. The IRS has guidance for this specific brand of identity theft.

Even the payments from the government to most Americans can cause confusion, and they have themselves become a potential hook for scammers. If you haven't received a COVID-19 payment from the government, you may still be eligible for a recovery rebate credit—but watch out for anyone promising free cash.

Confusion and uncertainty are perfect conditions for scammers, and the past year has also been replete with misinformation. It's hard to know what's true, and even harder to know where you can find reliable information. While PCMag can't provide financial or legal advice, we can help point you in the right direction.

Examine Everything

For starters, examine your tools. According to the IRS, filing electronically and with direct deposit is the safest way to handle your taxes. While it can feel weird or unsafe, these are time-tested tools. Last year, the IRS predicted that 90 percent of filings would be done electronically, and it's likely to be higher this year. If you opt to use IRS Free File instead of tax prep software, there's a suite of apps and sites available. Be sure you know which are legit.

Tax scams are so common that the IRS has an entire section of its site dedicated to cataloguing them. It makes for interesting reading, but it's also useful for learning how to spot scammers. Regardless of attack, the best defense is the same: go slowly.

Carefully examine emails you receive, and avoid clicking on links in messages or downloading attachments—especially if they come in unsolicited emails. Look for spelling mistakes, unusual URLs (https://www.irs.gov vs. http://www.ir-s.ru/taxplayer), and unusual email addresses. Even if the message seems legit, never give out personal information like Social Security numbers, tax ID numbers, or banking information via email, no matter who appears to be asking.

If you're using online tax software, make sure that you don't find yourself redirected to a phishing site. These are phony websites that mimic real ones to trick you into giving away your personal information. Check the URL in your browser's address bar carefully to be sure. Does it actually say www.turtbtax.com? www.turbotax.ru? For more, read our piece on how to avoid phishing scams.

Don't work on your taxes while using public Wi-Fi, but if you don't have a choice, be sure to use a VPN.

Also, if you hear someone is saying you can hide all your cash in cryptocurrency, think twice—and read our deep dive on the subject, Cryptocurrency and Taxes: What You Need to Know.

Make Direct Connections

Remember that it's always acceptable to go straight to the source. If you receive a suspicious email or phone call claiming to be from a government agency, bank, or bill collector, look up the organization's contact information (don't take it from the email said organization sent you) and reach out to them directly.

If someone contacts you from an organization you're unfamiliar with—such as a collection agency—contact the bank or company they claim to be working for and verify that they're legit. Be sure to look out for phishing sites while looking for contact information.

Don't Rush to Reply

Scammers know that adding time pressure or claiming missed deadlines can scare people into giving away information. It doesn't help that tax season has its own deadlines that stress people out enough as it is. Be on the lookout for surprise claims of missed payments or fast-approaching deadlines for payment. This is the government we're talking about, and it tends to move at a more sedate pace. If someone is pretending to be the feds or the cops and saying you need to take action right this moment, it's almost surely a scam.

Another scare tactic from scammers is to claim that victims have broken the law and pose as police or some other agency. Well-known scams will claim victims have unpaid parking tickets, an open warrant for their arrest, or an issue with their immigration status. The remedy is, as always, to pay up or provide personal information to the scammers. Engaging with the government is always intimidating, and fears of facing penalties for real or imaginary crimes even more frightening. If you receive communications claiming you've broken the law—even if you have—and threatening action, try and stay calm. Threatening emails and phone calls are rarely the tools used by these organizations.

Things the IRS Doesn't Do

Threatening phone calls and emails just aren't tactics that the IRS employs. In fact, you'll almost always hear from the IRS through the mail. On its website, the Agency has a handy list of things it will never do, but that a scam artist might. Here are a few (emphasis mine):

Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card, or wire transfer. Generally, the IRS will first mail a bill to any taxpayer who owes taxes.

Demand that you pay taxes now, without the opportunity to question or appeal the amount it says you owe. You should also be advised of your rights as a taxpayer.

Threaten to bring in local police, immigration officers, or other law-enforcement to have you arrested for not paying. The IRS also cannot revoke your driver’s license, business licenses, or immigration status. Threats like these are common tactics scam artists use to trick victims into buying into their schemes.

One thing the IRS is doing is expanding the Identity Protection PINs. This is a six-digit authorization code that identifies your tax return to the IRS. It was initially created because identity theft victims would experience fraud over and over again. It's a voluntary program, but may lend an additional layer of protection to your return.

Go Straight to the Source

Remember that the IRS has a vested interest in taxpayers filing returns on time and correctly. As a result, it has a surprising number of tools available to help you through the scariest stuff.

If you're having a hard time right now, file for a tax extension. If you receive suspicious messages from someone claiming to work for the government, report it to the IRS. The agency has an extensive FAQ on its website, and detailed contact information. If something doesn't seem right, give the IRS a call.

During all the madness of tax season, it can be hard to keep your wits about you. Just remember to go slowly and carefully, taking extra effort to stay safe while you file your return.