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By Aliss Higham
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With tax season now underway, taxpayers need to remain vigilant as scammers step up efforts to exploit confusion and financial stress.
Each year, millions of Americans become targets of fraud schemes that impersonate the Internal Revenue Service (IRS), promise fake refunds, or claim to offer debt relief. Estimates suggest that tax scams affect a significant portion of Americans each year. According to a 2025 McAfee survey, nearly one in four people—about 23 percent—said they or someone they know lost money to a scam claiming to be from the IRS or a state tax agency. The financial impact is substantial: there was an estimated $9.1 billion lost to tax-related fraud in 2024 alone, the IRS has reported.
As returns are sent off—an estimated 160 million are expected this year—criminals are using increasingly sophisticated tactics to steal money and identities, prompting renewed calls for caution during the peak of tax filing season. Here are some common scamming tactics to watch out for in the coming months.
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IRS Impersonation Calls, Texts and Letters
Scammers often pose as IRS agents or federal investigators, telling victims they owe back taxes or are under criminal investigation. These impostors often create a sense of urgency by claiming payment must be made within hours or that law enforcement will take immediate action, such as arresting the taxpayer or seizing their assets. Many use caller ID spoofing, fake badge numbers, and official-sounding language to appear credible.
The goal is to pressure victims into sending money through untraceable methods such as gift cards, wire transfers, cryptocurrency, or prepaid debit cards. And these types of scams are on the rise: a recent McAfee survey from the 2025 tax season found that almost one in two people reported being exposed, either personally or through someone they know, to fraudulent messages pretending to come from the IRS or a state tax agency.
In reality, the IRS does not threaten arrest, demand same-day payment, or initiate contact through phone calls, texts, or social media.
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Fake Tax Refund Messages (Phishing)
Another common scheme involves fraudulent refund notifications sent by text message or email.
These messages often claim a taxpayer’s refund is “pending” or “delayed” and instruct the recipient to click a link to verify their identity. The links typically lead to fake IRS websites designed to collect sensitive information.
Once entered, details such as Social Security numbers, IRS login credentials, and banking information can be used to file fraudulent tax returns or sold to other criminals.
Refund Theft and Identity Tax Fraud
In identity-based refund theft schemes, criminals use stolen personal information to file a tax return before the real taxpayer does and redirect the refund to their own account.
Victims usually only become aware of the fraud when their electronic filing is rejected or when they receive unexpected correspondence from the IRS stating that a return has already been filed in their name.
Resolving this type of fraud can take several months, as the IRS must verify the victim’s identity, remove the fraudulent return, and reissue the correct refund.
Fake Charities and Disaster Relief Scams
Scammers also exploit public sympathy during natural disasters or major crises by creating fake charities and relief funds.
They contact potential donors by phone, email, text, or social media, claiming that donations are tax deductible and urgently needed. In many cases, these fake organizations are not registered and pressure people to donate immediately, often requesting payment through gift cards, wire transfers, or cryptocurrency.
Beyond losing money, victims can also have their personal information stolen, which can later be used for identity theft or tax fraud.
'Offer in Compromise' Mills
So-called “offer in compromise” companies advertise that they can help taxpayers settle IRS debts for a fraction of what they owe.
While the IRS does offer a legitimate program, most people do not qualify. Many of these firms charge high upfront fees and submit generic forms regardless of eligibility, providing little or no real assistance.
As a result, duped clients often lose thousands of dollars, miss critical IRS deadlines, and face increased penalties and interest when their applications are denied.
If You Think You've Been Scammed
Anyone who believes they have been targeted by a tax scam should immediately stop communicating with the scammer, avoid sending money or sharing personal information, and contact their financial institution. Those affected by identity theft are also encouraged to follow the recovery steps on IdentityTheft.gov.
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