Tax season is a critical time for scammers to prey on unsuspecting people and businesses. While some scams remain consistent year after year, new and sophisticated schemes continue to emerge. Being informed is your first line of defense.
Here are some typical tax scams you might see all the time, and new ones to look out for in 2025.
Common Tax Scams
1. Phishing emails and text messages
Cybercriminals often send fake emails or text messages that appear to be from the IRS. These messages may request sensitive information, such as Social Security numbers or bank details, pretending to help with tax refunds or account verification.
Be aware that the IRS never initiates contact via email or text. Also, always verify the sender before sharing information.
2. Phone scams (impersonation calls)
Scammers may pose as IRS agents, threatening legal action or arrest unless immediate payment is made. They may demand payment via gift cards, wire transfers, or cryptocurrency.
The IRS does not demand immediate payment over the phone or threaten arrest.
3. Fake tax preparation services
Fraudulent tax preparers may inflate refunds or steal personal information.
To protect yourself, use reputable tax professionals. Always check for credentials and reviews before hiring.
4. Identity theft
Scammers use stolen information to file fraudulent tax returns and claim refunds.
File your taxes early to reduce the risk of identity theft and use identity protection services if available.
Emerging Tax Scams in 2025
As technology advances, so do the tactics of scammers looking to exploit taxpayers. Below is an in-depth look at emerging tax scams for 2025 and how to protect yourself.
1. AI-generated scam calls and emails
Scammers are now leveraging artificial intelligence (AI) to craft highly realistic and convincing calls, emails, and even deepfake video messages. These communications may mimic the tone and language of legitimate IRS agents or tax preparers.
AI tools analyze existing IRS or professional communication patterns to generate messages that sound professional and credible. Scammers may include personalized information to gain your trust, such as your name or employer information.
For example, you might receive a voicemail with a voice that sounds authentic, claiming you owe back taxes and must call back immediately to avoid penalties.
To stay safe, always be skeptical of urgent requests for payment or information. The IRS typically initiates communication by mail, not phone. Verify communication directly through official IRS channels.
2. Crypto and NFT tax scams
The growing popularity of digital assets like cryptocurrencies and non-fungible tokens (NFTs) has created new opportunities for scammers to exploit tax confusion.
Scammers may contact individuals, claiming that they have underreported their crypto gains or are eligible for special deductions. Fraudulent services may also offer to “optimize” your crypto taxes for a hefty fee.
Be sure to report digital asset gains and losses accurately. Only use licensed tax professionals familiar with crypto regulations, and avoid unsolicited offers promising tax benefits for digital assets.
3. Fake IRS payment portals
Scammers are creating sophisticated fake websites that mimic the IRS’s online payment system. These sites are designed to steal personal and financial information.
For example, you may receive a phishing email with a link directing you to a counterfeit IRS website. There, you’ll be prompted to enter sensitive information or make a payment.
You should always use the official IRS website for payments. Also, double-check URLs for authenticity. You should also enable browser security alerts to warn you of unsafe sites.
4. E-file scams
Cybercriminals are increasingly targeting online tax filing services to intercept or manipulate tax returns They do this by infiltrating unsecured networks or compromised tax preparation software, altering refund information or rerouting deposits to their accounts.
You might realize you’ve been scammed only when your refund never arrives because a hacker changed the deposit information.
To secure your information, use secure, encrypted internet connections when filing taxes. You should also enable two-factor authentication on tax preparation accounts. To keep track of your return, regularly check in with the IRS’s “Where’s My Refund?” tool.
5. Employee Retention Credit fraud offers
The Employee Retention Credit (ERC) remains a point of confusion for many businesses. Scammers are taking advantage by promoting fraudulent claims and enticing small businesses to apply for credits they do not qualify for.
For example, fraudsters pose as “specialists” offering guaranteed ERC eligibility for a fee. They may manipulate business records to create the illusion of eligibility or submit false claims on your behalf.
Be sure to verify eligibility for ERC directly through the IRS or a trusted CPA. Avoid anyone who promises guaranteed tax credits, and be cautious of firms charging upfront fees based on potential refunds.
How to Protect Yourself
- Verify communication: Always double-check any communication claiming to be from the IRS.
- File early: Reduce your exposure to tax-related identity theft by filing your taxes as soon as possible.
- Secure your information: Use strong passwords and multi-factor authentication for online tax accounts.
- Monitor your financial accounts: Keep an eye on bank and credit accounts for suspicious activities.
- Use verified tax preparers: Check credentials through the IRS Directory of Federal Tax Return Preparers.
What to Do If You Suspect a Scam
If you suspect that you’ve been targeted or fallen victim to a tax scam:
- Contact the IRS: Call the IRS at 1-800-829-1040 to report suspicious activity.
- Report phishing emails: Forward suspicious emails to phishing@irs.gov.
- File an identity theft affidavit: If you believe your information was stolen, file IRS Form 14039.
Stay Safe With Help From AZCCU
The best defense against tax scams in 2025 is awareness and caution. Stay updated on the latest IRS alerts, protect your personal information, and always verify any communication related to your taxes. If something seems suspicious, it’s better to double-check than to fall victim to a scam.
Arizona Central Credit Union is here to help you with your banking and loan needs. We even have calculators that can help you understand your debt, your budget, and what you need to do for your retirement. If you have any questions, contact us online or call (866) 264-6421.
Information in this article is not meant to be taken as tax advice. A tax professional should be contacted for specific situational advice.
