Tax scams: What to watch for in 2025
Tax season is a time of year that many people approach with a mix of anticipation and trepidation. For some, it's a chance to claim refunds and get a financial boost. For others, it's the dread of navigating paperwork or meeting expensive tax obligations. But for scammers, tax season is a prime opportunity to prey on unsuspecting people. Each year, con artists refine their tactics to deceive taxpayers out of their hard-earned money.
The stakes may be higher than you may expect, too, as tax scams often target not only your money but also your personal information. As a result, falling victim to this type of scam can result in significant financial losses and long-term damage. Worse still, the emotional toll of being scammed can leave you feeling violated — which can be tough to deal with, especially in addition to the financial fallout you could face.
And while traditional tax scams continue to plague taxpayers, scammers are now adopting even more sophisticated schemes that blend social engineering with cutting-edge technology to target taxpayers. Luckily, you can help protect yourself from these types of scams by being informed of the latest tax scam tactics.
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Tax scams: What to watch for in 2025
Here are some of the tax scams to watch for during this year's tax season:
AI-generated phishing schemes
This year, scammers are expected to ramp up their use of artificial intelligence (AI) to craft highly convincing phishing emails and messages. These communications often mimic legitimate IRS notices or correspondence from tax preparation services. And, AI can generate personalized messages that include your name, address and other details, making the scam harder to detect. So, it's important to be wary of any unsolicited emails or texts claiming urgent tax issues — especially those demanding immediate payment or threatening legal action.
Tip: The IRS will never initiate contact with you via email or text. Always verify the authenticity of such messages by contacting the IRS directly through their official website or phone numbers.
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Fake tax preparer scams
Another scam to watch out for this tax season involves fraudulent tax preparers. These scammers pose as professionals offering low-cost or expedited tax filing services. Once they gain access to your personal and financial information, though, they can file false returns in your name or steal your refund. Some fake preparers even lure victims by promising unrealistic refunds.
Tip: Always vet tax preparers carefully. Look for credentials such as a Preparer Tax Identification Number (PTIN) and reviews or references from trusted sources.
Imposter phone calls
Despite being a long-standing tactic, phone scams remain effective even now, with scammers calling victims and posing as IRS agents to claim that they owe back taxes or penalties. They often use fear tactics, such as threats of arrest, to coerce victims into making immediate payments via gift cards, wire transfers or cryptocurrency. Some even use caller ID spoofing to appear legitimate.
Tip: The IRS will never call you demanding immediate payment. If you receive such a call, hang up and report the incident to the Treasury Inspector General for Tax Administration (TIGTA).
Social media scams
Social media platforms have increasingly become a tool for tax scammers. Fraudsters use fake profiles or hacked accounts to offer "secret" tax loopholes, claim processing shortcuts or promote fraudulent investment opportunities. They may also post phishing links that lead to fake IRS sites designed to steal your information.
Tip: Be cautious about engaging with unsolicited offers or links on social media, especially if they promise unrealistic results. Stick to official IRS channels for accurate tax information.
Data breaches and identity theft
Data breaches also pose a significant risk during tax season, as scammers can exploit stolen data to file fraudulent tax returns in your name. Once your identity is compromised, it can take months or even years to resolve the fallout.
Tip: Use strong passwords and enable multi-factor authentication on accounts that store sensitive information. You may also want to consider filing your tax return early to reduce the chances of someone else filing in your name.
The bottom line
Tax scams are a growing threat, but knowledge is your best defense. As you navigate this year's tax season, remain vigilant and skeptical of unsolicited communications, especially those requesting sensitive information or immediate payments. Rely on trusted professionals and official IRS channels for assistance, and don't hesitate to report suspicious activity. By staying informed and proactive, you can outsmart scammers and protect yourself from becoming a victim of these or other tax-related scams that can cause serious damage to your finances.