Tax Season Online Scams to Reach Record Levels

-Most (and Least) At-Risk States for Online Scams During Tax Season-

-Top 5 Tax Season Scams and How to Avoid Them-

An unprecedented number of online scams are expected during tax season.

A record $394 million was lost to government impersonation scams in 2023, up from $241 million the year prior. The bulk of these losses take place during tax season when scammers pretend to be IRS agents.

Scammers use a wide array of sophisticated tactics across all digital platforms, to trick victims into giving away personal information, financial information, and the hard-earned money they put aside all year for taxes.

Once a criminal possesses personal information – such as a social security number – they can commit identity theft and file a tax return in your name and claim your refund. They can also open credit cards in your name, apply for bank loans and make unauthorized charges from your bank account.

Reverse search company Social Catfish today released a report on the alarming rise of tax season scams to raise awareness and to educate Americans on how to avoid becoming victims.

Which States are Most at Risk?

While online scams can happen anywhere, residents in some states are more susceptible to being scammed than others. Criminals often will tailor their scam to geo-target their victims based on their location.  Depending on where the victim lives, they may call or text using a local area code, they may email with a local address in their email signature, or they may post a fake advertisement speaking directly to local residents.

We ranked which states are the most (and least) at risk for online scams during tax season based on financial losses from 2023 according to the FBI Internet Crime Complaint Center.

Top 5 Tax Season Scams in 2024 and How to Avoid Them

An unprecedented number of Americans are losing their life savings during tax season to online scammers, and the crisis is worsening exponentially each year.  Until law enforcement has a more effective method to prevent scams or to help victims recover their money, it is critical Americans educate themselves on how to avoid scams before they happen.  Here are the top scams to watch out for in 2024.

TurboTax Scams: Scammers send emails pretending to be from TurboTax, asking recipients to update their account information or claiming there’s an issue with their tax return. In another version of this scam, fake websites that mimic the official TurboTax website trick victims into sharing personal and financial information.  

How to Avoid: Avoid third-party websites or advertisements offering TurboTax at a discounted price. Go directly to turbotax.intuit.com to use their software.

Fake Accountant: Scammers pretend to be a CPA who promises unusually high tax refunds at very low prices. Of course, payment for these services are due up front, and once the “accountant” gets paid and has your personal information they disappear.  

How to Avoid: Perform a reverse search to confirm the identity of the tax preparer using their email, phone number, or photo. If something seems too good to be true, it is.

Spoofing IRS Phone Call: Criminals call victims using a ‘spoofing’ technique which makes the number appear as though it is coming from the IRS. They claim the victim owes money for unpaid taxes and threatens to fine them or arrest them if it is not paid.

How to Avoid: Visit IRS.gov directly to make any payments.

Unclaimed Refund: Scammers send emails with the IRS logo telling victims they are owed more money and can immediately claim their tax refund by clicking a link and filling out the information. This is a ‘phishing link’ designed to steal personal information.

How to Avoid: The IRS never initiates contact by email, text messages or social media.

Employee Retention Credit: The ERC is a tax credit for businesses that retained employees during COVID-19. Scammers post ads on social media claiming they can help business owners – even those who are not eligible – get their ERC credit right away.

How to Avoid: Use a trusted tax preparer. Do not respond to an unsolicited third party.

What to do if You Have Been Scammed

If you believe you are the victim of an IRS online scam, please report it to the Treasury Inspector General Administration (TIGTA) and the Federal Trade Commission.