Tax season already brings its share of stress — and unfortunately, it also attracts scammers. Fraud can happen year-round, but the months leading up to the April filing deadline are especially risky. Understanding how common tax scams work is one of the best ways to protect yourself and your finances. Some common scams to watch for:
Tax Identity Theft
Tax identity theft occurs when someone uses your Social Security number to file a fraudulent tax return and claim your refund. Often, victims only discover the issue when their legitimate return is rejected because one has already been filed. Another variation involves criminals using your Social Security number for employment, leading the IRS to believe you earned income you never received, potentially triggering unexpected tax bills or benefit reductions.
How to protect yourself:
File your tax return as early as possible and carefully review all IRS correspondence. Consider enrolling in the IRS Identity Protection PIN pro-gram, which adds an extra layer of security to your return.
IRS Imposter Scams
In these schemes, scammers pose as the IRS via phone calls, emails, texts, or even social media. They may claim you have an unclaimed refund, owe back taxes, or face immediate legal consequences. These messages often create urgency and ask for sensitive personal or financial information.
How to protect yourself:
Remember that the IRS does not initiate contact through email, text, or social media. Legitimate IRS com-munications arrive by mail on official letterhead. Be cautious of spelling errors, unusual links, or pressure to act immediately.
Ghost Tax Preparers
A ghost preparer accepts payment to prepare your taxes but disappears before filing your return, or never signs it. This can leave you liable for errors or unfiled returns.
How to protect yourself:
Verify that your preparer has proper credentials, including an IRS Preparer Tax Identification Number (PTIN). Avoid preparers who demand full payment upfront, promise unusually large refunds, or ask you to sign a blank return. Always review your return carefully before it’s filed.
Tax scammers may be getting more sophisticated, but using best practices can keep you safe from becoming a victim.
Source: US Bank
