10 Tax Refund Scams to Watch Out For

As we get closer to the federal tax deadline, scammers are increasing their attacks on taxpayers. Here's what to keep a watch for.
Last updated April 3, 2023 | By Jenny Cohen
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Tax season can be stressful as you try to pull together forms, bank statements, and other information in order to file your taxes. Criminals see this time as advantageous and increase their deceptive tactics as they masquerade as representatives of the Internal Revenue Service. Their scams attempt to trick you into sharing personal information — potentially stealing your identity and your hard-earned money.

Here are some of the scams to be familiar with, so you can avoid them this tax season.

Threatening phone call

Wayhome Studio/Adobe woman calling to pay bills with credit card

You answer your phone to hear the voice of someone you presume to be an employee of the IRS saying you owe them money and could be prosecuted if you don’t pay up. That can be a scary call to answer, and your first reaction may be to do what they ask.

Be cautious. One red flag with this scam is that criminals may ask you to pay your bill with gift cards or a wire transfer, but the IRS never would. The IRS would also never demand that taxes be paid immediately without you being able to ask questions or go through an appeal process.

Canceling your SSN

Rick/Adobe Fake Social security card on prop US currency

Scammers pretending to be the IRS may tell you that you’ve done something wrong with your taxes and there will be consequences if you don’t pay up — including having your Social Security number erased.

If someone is threatening to take away your Social Security number, driver’s license number, or any other type of identifying information, chances are they’re not really from the Internal Revenue Service. Never divulge this information to someone calling you up (or emailing you) out of the blue.

Impersonating TAS

Yurii Kibalnik/Adobe Form 911 Request for Taxpayer Advocate Service Assistance

The Taxpayer Advocate Service, or TAS, is a legitimate agency within the IRS that can assist you with your taxes if issues arise. They can help you if you’ve made a mistake on your return or are having trouble paying your taxes. But typically, you have to reach out to a TAS member first to initiate the need for help.

Be wary if someone calls or emails out of the blue identifying themselves as someone at the TAS.

Tax transcript email

sitthiphong/Adobe businesswoman using computer and show malware screen

It may look legitimate, but these emails from scammers are disguised to deceive taxpayers into thinking they are from a bank, financial institution, or even the IRS. They also may include a file that you’ll be asked to download as your “official” tax transcript. Do not download anything unless you are 100% certain it is legitimate.

That file is likely malware and once you click the link, it can infect your computer or network. It’s important to remember the IRS will not send unsolicited emails to you, which should be your first red flag. Instead, delete the email or you can forward it to phishing@irs.gov, which may trigger an investigation into the scam.

Pro tip: Click on the senders’ email address to see who is actually emailing you. While the email might look legitimate, when you double click on the address from the sender, what you may see is something more suspicious.

Ghost preparers

Proxima Studio/Adobe accountant working with US tax forms

You may decide to save some money on an accountant and use someone with a phone number you found on a flier. Sure, they’re cheap, but it may cost you in the long run if you don’t first investigate if they are legitimate. They could be stealing your identity or bank information. Some of these scams can include itemizing deductions that don’t really exist in an effort to inflate your return, which they then direct to their own bank account.

To avoid this scam, use a reputable tax preparer who has a proper tax preparer ID number. Alternatively, you it’s easy and safe to use some of the best tax software too.

Pretending to be the FBI

Kristina Blokhin/Adobe Federal Bureau of Investigation Headquarters

In addition to faking IRS credentials, some scammers may also pretend to be agents from the Federal Bureau of Investigation, or FBI, who claim to be working with the IRS to track down information about taxpayers. These criminals may include an email that asks you to click on a link and fill out a questionnaire for the FBI.

This FBI ransomware scam attempts to get your Social Security number or bank account number. If someone tried to do this to you, the FBI asks that you contact the Internet Crime Complaint Center and forward any IRS-themed scams to phishing@irs.gov.

Making a last-minute change

fizkes/Adobe Upset confused African woman holding cellphone having problem with phone

You may think you don’t need to worry about scams because you filed your taxes on time, but don’t let your guard down. Scammers may try to contact you about “last-minute changes” that need to be made quickly, and you might comply because of the need to respond swiftly.

They may ask you to reroute your refund to a prepaid credit card or give them your personal financial information. Take a moment to reflect and question those asking for your information.

Faking a refund

Vitalii Vodolazskyi/Adobe Tax refund scam red sheet about fraud and money

You may think it’s a nice surprise to get an email saying the IRS owes you more money, but don’t click on that link just yet. This may be another example of scammers tricking you into going to a website and giving them your personal information under the guise of trying to get your additional money that may never show up.

Pro tip: If you are expecting money back from the IRS, the government agency offers a website to check on your refund. Always check the URL in your browser to make sure you’re using the official irs.gov site.

Outstanding stimulus payments

Tada Images/Adobe IRS logo is seen on the Internal Revenue Service (IRS) website

This scam has popped up recently because of changes to the law due to the COVID-19 pandemic. You may have received stimulus money from the government or had to account for additional unemployment benefits on your tax return. But this also could open you up to scammers who are hoping to confuse you about these new laws.

Again, if it sounds fishy, it probably is, especially if they’re initiating contact with you.

Scamming after Tax Day

Lane Erickson/Adobe IRS Tax Auditor

Just because you filed your taxes and Tax Day has passed doesn’t mean you can let your guard down. Scammers may still try to contact you by email, text, or phone calls year-round to find ways to get your money.

There has also been an increase in fake unemployment claims, so keep an eye out for any documentation from your state’s unemployment office about taxes that you may owe on claims fraudulently filed in your name.

Bottom line

Rawpixel.com/Adobe tax refund income paying revenue statement pay concept

It’s hard enough to manage your money without the added pressure to be hyper-vigilant about tax scams, but there are ways to protect yourself. Remember that the IRS will likely not contact you directly by phone or email, and be wary of anyone who identifies themselves as an agent asking for your personal information.

If you do suspect someone is trying to scam you, you can report them to the IRS.

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Author Details

Jenny Cohen Jenny Cohen is a freelance writer who has covered a bit of everything, from finance to sports to her favorite TV shows. Her work has been featured in The Wall Street Journal, USA Today, and FoxSports.com.