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Top Scams to Watch Out for This Tax Season

Tax s​eason has arrived, and scammers are ready. While this time of year is always prime time for scams, criminals are also using the pandemic to take advantage of unsuspecting taxpayers and steal their personal and financial information.

Don't fall for the scams this tax season! Here are some of the most common tax-related scams to watch for this year, plus tips to avoid them:

Tax Refund Fraud

If a scammer has your personal information, such as your name, birthdate, and Social Security number, they can file a fraudulent tax return in your name and steal your refund. You may not find out the fraud has occurred until you try to file your tax return and it gets rejected due to a duplicate filing. 

To stay ahead of the scammers, file your taxes early in the season before someone else can file in your name. You can also request an Identity Protection PIN (IP-PIN) from the IRS. This adds an extra layer of security and helps the IRS verify your identity when you file.

IRS Imposter Scams

It's very common for scammers to pose as IRS officials and contact taxpayers demanding payment or sensitive information. Scammers know they can trick people into giving out their information by using scare tactics. For example, they may claim to be able to cancel or suspend your Social Security number. Some scammers may even threaten you with criminal charges or lawsuits if you don't act now.

If you're contacted by someone claiming to be from the IRS, be cautious and pause before reacting. Remember, the IRS does not initiate contact with taxpayers via email, text message or social media to request personal or financial information. If you're unsure, don't respond. Instead, call the IRS directly at (800) 829-1040 to verify.

Phishing Emails

During tax season, scammers will often send emails posing as tax software services, tax professionals and other reputable sources in an attempt to steal taxpayers' personal or financial information. Scammers will even use phishing emails to target tax professionals and steal their clients' data.

Be on the lookout for strange-looking emails, even if they appear to be from trusted sources. Use your mouse to hover over any links before clicking on them, and don't download attachments in suspicious emails. Clicking on unfamiliar links or attachments could take you to a fake website portal or download malware onto your device. Other phishing red flags to look for include poor grammar, unusual sentence structure and misspelled words. If the email addresses you by “Dear Sir/Madam" instead of your name, that's also a sign of a phishing scam.

“Ghost" Tax Preparers

While many tax preparers are reputable, there are also bad actors who pose as professionals and don't have your best interests at heart. The IRS warns taxpayers to look out for unethical “ghost preparers" who do not sign tax returns they prepare. Not signing is a red flag that the person is unprofessional and only looking to make a quick profit. Other warning signs include preparers who promise a big refund, require payment in cash only or charge fees based on the size of your refund. 

Be sure to do your research when choosing a tax preparer. Professional paid tax preparers must have an IRS Preparer Tax Identification Number (PTIN). It's also important to find a preparer who has cybersecurity measures in place to protect your information from fraud.

Unemployment-related Tax Fraud

Throughout the pandemic, scammers have taken advantage of opportunities to file fraudulent unemployment claims using people's stolen personal data. If the scammer succeeds in getting the unemployment income, the identity theft victim will be sent a tax form for the benefits (Form 1099-G).

If you receive a 1099-G form, but didn't collect unemployment money, reach out to your state unemployment agency right away for a corrected form. This will show the IRS that you didn't actually receive unemployment benefits, helping you avoid being hit with an unexpected federal tax bill for unreported income.

What to do if you're a victim of tax fraud

  1. File a police report and report the fraud to the Federal Trade Commission at or call the FTC Identity Theft Hotline at 1-877-438-4338.
  2. Contact the IRS' Identity Protection unit at 800-908-4490.
  3. Request a fraud alert on your credit report. Contact one of the three major credit reporting agencies (Equifax, Experian or TransUnion) and ask them to put a fraud alert on your credit records. You can also request a credit freeze, which will stop any new credit accounts from being opened in your name.

Tax fraud isn't limited to tax season. It's important to take steps to protect your personal and financial information all year round!

WPCU is here to help you protect your personal and financial information year-round. For more fraud prevention tips, tools and resources, visit​.

The information contained in this article is for education and informational purposes only and does not constitute professional advice. The information provided is subjective and you should always do your own research before making decisions. While reasonable efforts are made to include accurate and up-to-date information, Wright-Patt Credit Union makes no warranties or representations of any kind concerning the accuracy, timeliness or suitability of the information provided for any purpose. Validity of the content is not guaranteed, and you are strongly urged to consult a professional or other authority in the appropriate field, such as a tax professional, before acting on any of the content.