Tax Fraud: What to Look Out For

April 11, 2025
3 Min read

Tax season is here and, unfortunately, can also be a time when scams increase. Recognizing the importance of staying vigilant against fraud and understanding the common tactics used by fraudsters can significantly reduce the risk of falling victim to tax-related scams. Here are some helpful tips to help you navigate tax season safely and confidently.

Be on the lookout for:

  • Urgent demands pushing you to make a quick decision.
  • Unusual forms of contact, especially through emails, text messages, social media, or unsolicited advertisements.
  • Uncommon requests for payment through social media or in the form of gift cards or prepaid cards.
  • Promises of a big payday! If it sounds too good to be true, it probably is.

Common tax scams include:

  • Misleading tax advice from social media or untrusted sources
  • Anyone impersonating law enforcement or government officials
  • Fake charities or charity impersonator
  • Dishonest or unqualified tax preparers
  • False claims of tax debt settlement or relief services
  • Unexpected tax bill to trick you into paying them
  • Offers to set up an IRS account on your behalf
  • Promises to find unclaimed tax refunds

The IRS will NEVER:

  • Initiate contact with you through email, text, pre-recorded voicemails (robocalls), or social media
  • Threaten to call law enforcement or immigration officials
  • Threaten to take your citizenship status, driver’s license, or other business licenses
  • Mail tax debt resolution advertisements

Here are some preventive measures to help protect yourself from tax fraud schemes:

  1. Verify IRS Communications: Always verify any communication claiming to be from the IRS.
  2. Use Secure Online Platforms: When filing taxes online, use secure and reputable platforms. Ensure the website URL starts with “https://” and has a padlock symbol.
  3. Protect Personal Information: Keep your Social Security number, tax records, and other sensitive information secure. Avoid sharing these details over the phone or online unless you are certain of the recipient’s legitimacy.
  4. Beware of Phishing Scams: Be cautious of emails or messages that ask for personal information or direct you to a website. Verify the sender’s email address and look for signs of phishing, such as misspellings or suspicious links.
  5. Monitor Your Accounts: Regularly check your bank and credit card statements for any unauthorized transactions. Report any suspicious activity immediately.
  6. Use Strong Passwords: Create strong, unique passwords for your online accounts, including tax filing accounts. Consider using a password manager to keep track of them.
  7. Stay Informed: Keep up to date with the latest tax fraud schemes and preventive measures by following IRS updates and other reliable sources.
  8. Consult a Professional: If you’re unsure about any tax-related communication or need assistance, consult a trusted tax professional.
  9. Get an Identity Protection PIN (IP PIN): An IP PIN is a six-digit number that prevents someone else from filing a tax return using your Social Security number.
  10. Set up an IRS tax account. Your IRS account is securely protected with multifactor authentication. Nobody can view your account unless you authorize them.

Tax fraud schemes can be quite concerning, but you can mitigate risks through proactive vigilance and preventive measures. By staying informed, protecting your personal information, and verifying any suspicious communications, you can safeguard yourself from potential scams. Remember, when in doubt, consult with your advisor, a trusted tax professional, or contact the IRS directly to ensure the legitimacy of any tax-related inquiries. Your diligence today can prevent headaches and financial loss in the future.

 

 

Tolleson Wealth Management is not a CPA Firm. This presentation has been prepared for informational purposes, does not contain a complete discussion on the U.S. federal, state, local or non-US tax considerations, and is not intended to provide and should not be relied on for tax advice. Please consult your tax consultant for more information on your individual circumstances.

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