Tax season scams: How to recognize and avoid fraud.
Key takeaways:
- Tax season is prime time for scammers who are looking to steal your personal information.
- Common scams include phishing emails, threatening phone calls, fraudulent tax professionals and urgent requests for money or sensitive data.
- Staying alert to these tactics and verifying all tax-related communications can help you avoid becoming a victim.
Tax season can be stressful enough without scammers trying to take advantage of you. Every year, fraudsters ramp up opens in a new window their efforts to steal personal information, intercept refunds and cause financial chaos. The good news? You can protect yourself by knowing what to look for and taking a few smart steps.
Why tax scams spike during filing season.
Scammers take advantage of the urgency of the tax season. When people are focused on deadlines, refunds, and meeting requirements, they may be more inclined to respond quickly to messages that seem legitimate.
Fraudsters exploit this by impersonating trusted sources like the IRS or legitimate tax preparers.
That results in victims often sharing sensitive information or sending money before realizing the request was fake. Understanding the tactics scammers use is the first step toward staying safe.
“It’s unfortunate as they will play on your vulnerabilities to get you to do what they ask as when you hear this is the IRS or Law Enforcement, you immediately want to comply,” says Sarah Clark, senior manager of investigations for Commerce Bank. “That is when you need to stop and ask yourself, does this make sense, why would any of these individuals ask me to purchase gift cards and send them the card information, or to send money through Venmo, Cash App, Apple Pay, or other cash apps? They wouldn’t, and this alerts you that it’s a scam.”
Common types of tax scams.
Tax scams come in many forms, but most share one goal — to steal your identity or your money. Here are the most common tactics to watch for:
- Phishing emails and texts opens in a new window that impersonate the IRS and ask for sensitive information. These messages often look convincing, complete with official logos and urgent language. They may include links to fake websites designed to capture your Social Security number or banking details.
- Phone scams opens in a new window demanding immediate tax payments. Fraudsters call pretending to be IRS agents, threatening arrest or legal action unless you pay right away—usually using wire transfer or gift cards. The IRS never demands payment over the phone.
- Fraudulent tax preparation services opens in a new window promising big refunds. Some scammers pose as tax professionals, offering to file your return for a fee. Instead, they steal your personal data or submit false information to claim your refund.
Warning signs of tax fraud.
Fraud can happen quietly, so it’s important to watch for red flags. Scammers mislead opens in a new window you about tax refunds, credits and payments. They pressure you for personal, financial or employment information or money. Here are signs that something isn’t right:
Unusual requests for personal or financial details:
Legitimate agencies won’t ask for sensitive information by email, text or social media.
Unexpected tax refunds or notices from the IRS:
If you receive a refund you didn’t expect, someone may have filed a return in your name.
Changes to your tax information without your knowledge:
Monitor your IRS account for updates you didn’t authorize.
If you notice any of these warning signs, contact the IRS directly using official channels — not the phone number or link in the suspicious message. There are several ways to report fraud and scams, including anonymously.
How to protect your personal information.
Preventing fraud starts with proactive steps. Taking these precautions now can save you from headaches later. Here’s how you can safeguard your data:
- Create a secure IRS online account to monitor your tax records. This helps you spot unauthorized activity early.
- Verify any tax-related communication before responding. Remember, the IRS will never call or email you to demand payment.
- Use strong passwords and avoid public Wi-Fi for sensitive transactions. Consider enabling multi-factor authentication on financial accounts for added security.
- Consider enrolling in Commerce Bank’s identity theft services, such as Commerce ID Recover or Commerce ID Monitor, for added peace of mind.
Now more than ever, it’s critical that you stay aware of your finances and activity in your account(s) on a weekly if not daily basis”
says Clark. “This allows you to stay on top of the transactions going in and out of your account(s) and you can quickly recognize unauthorized activity. Remember, fraudsters are good at what they do. This is how they steal your money, don’t allow them to benefit from you.”
Take action today.
By staying informed and vigilant, you’ll have peace of mind during tax season. Set up your IRS account, share these tips with family and friends, and help stop tax scams before they happen.
Want more personalized guidance? Talk to your Commerce Bank banker about additional ways to protect your finances. They can help you set up accounts, review your financial plan and make sure you’re ready for tax season.
