Top Tax Scams: Tax season can be stressful enough without worrying about fraud. But every year, scammers find new ways to trick taxpayers, and 2025 is no different. From phishing emails to fake tax preparers, these scams are more sophisticated than ever. Staying safe starts with being informed. In this guide, we’ll walk you through the top tax scams to watch out for in 2025 and how you can protect yourself and your finances.
Whether you’re filing on your own or working with a tax professional, understanding these scams is crucial. The IRS and cybersecurity experts warn that fraud is on the rise, and unsuspecting individuals and small business owners are often prime targets.
Top Tax Scams to Watch Out for in 2025
| Topic | Details |
|---|---|
| Top Scam Types | Phishing, Ghost Preparers, IRS Impersonation, Fake Charities, Identity Theft |
| Target Victims | Individuals, Seniors, Small Business Owners, Tax Professionals |
| Most Common Tactic | Email and text message phishing (“smishing”) |
| IRS Contact Method | Official mail via USPS (never by phone/email first) |
| IRS Scam Report Page | https://www.irs.gov/help/tax-scams |
| Tips for Safety | File early, verify tax preparers, use MFA, avoid clicking suspicious links |
Tax scams are evolving fast, but knowledge is your best defense. By staying aware of the top tax scams to watch out for in 2025, using official resources, and taking basic precautions, you can protect yourself and your finances. Don’t let fraudsters get the best of you this tax season.
Why Tax Scams Are Increasing in 2025
According to the Federal Trade Commission (FTC), tax scams are becoming more frequent and sophisticated. In 2024 alone, U.S. taxpayers lost over $5.8 billion to fraud—a figure projected to rise in 2025. With advancements in Artificial Intelligence (AI), scammers now create more convincing phishing messages and fake websites, making it harder to tell what’s real and what’s not.
Combine that with a complex tax system, and many people end up vulnerable. The IRS reports that scams often peak from January to April, when most Americans are preparing their taxes.
Common Tax Scams to Watch Out For
1. Phishing and Smishing Attacks
Scammers send emails or text messages pretending to be the IRS. They may say there’s an issue with your return or offer a refund, prompting you to click a link. The link often leads to a fake website designed to steal your Social Security number or bank details.
Tip: The IRS never initiates contact through email, text, or social media. Always go to IRS.gov directly.
2. Ghost Tax Preparers
These are fake “tax experts” who prepare your return but don’t sign it, leaving you legally responsible. They often promise big refunds or claim fake deductions.
What to Do: Only work with tax preparers who have a valid Preparer Tax Identification Number (PTIN). You can verify credentials via the IRS Directory of Federal Tax Return Preparers.
3. IRS Impersonation Phone Calls
You get a call from someone claiming to be an IRS agent demanding immediate payment. They may threaten arrest or legal action if you don’t comply.
Warning: The IRS will never demand payment over the phone or request gift cards or crypto.
4. Fake Charities and Donation Scams
These scams spike during disasters and tax season. Fraudsters create fake charities to collect donations that are never used for good.
Stay Safe: Check if a charity is legit using the IRS Tax Exempt Organization Search.
5. Identity Theft and Fraudulent Tax Returns
Criminals file a fake return using your stolen Social Security number, collecting a refund before you even file.
How to Protect Yourself:
- File early
- Monitor your IRS account
- Set up Identity Protection PIN (IP PIN) through the IRS
6. Social Media Misinformation
Fraudulent “tax hacks” or bad advice go viral on TikTok, Facebook, and YouTube, encouraging illegal deductions or misuse of tax forms.
Tip: Always verify tax information with certified CPAs or the IRS. Don’t follow advice that seems too good to be true.
7. Fake Tax Relief Services
Some companies advertise debt relief programs that promise to settle your tax debt for “pennies on the dollar.” Many of these are scams that charge high fees and disappear.
What to Do: Use the IRS Offer in Compromise Pre-Qualifier to see if you qualify before working with third parties.
8. Business Spear Phishing Attacks
Cybercriminals target small businesses and accounting firms with personalized phishing emails. These emails mimic vendors or partners and aim to steal employee W-2s or client data.
Prevention: Educate employees, implement email filters, and use multi-factor authentication.
How to Protect Yourself from Tax Scams in 2025
1. File Early
The sooner you file, the less time scammers have to use your identity fraudulently.
2. Use Multi-Factor Authentication (MFA)
Enable MFA for any tax software or financial accounts. It adds an extra layer of protection.
3. Never Share Sensitive Information via Email or Text
If someone asks for your Social Security number, bank account, or other personal details over email or text, it’s a red flag.
4. Use Secure Wi-Fi
Avoid filing your taxes over public Wi-Fi networks. Use a VPN or a private network to stay secure.
5. Monitor Your Tax Account
Create an account at IRS.gov to view your tax history, balance, and any filed returns. This helps detect fraud early.
6. Set Up IRS Identity Protection PIN
An IP PIN is a six-digit number that prevents someone else from filing a tax return using your Social Security number.
Examples of Recent Tax Scams
- In early 2024, a group of scammers in California used AI-generated IRS notices to trick over 2,000 taxpayers into submitting their login credentials.
- A fake tax preparation firm called “FastRefund Pro” was shut down after defrauding low-income families with fake child tax credits.
- A social media trend falsely claimed you could get a $5,000 refund using Form 7202, even if you were ineligible. The IRS flagged it as a “frivolous filing” scam.
- In Florida, scammers pretended to be from FEMA and offered “tax credit advances” in exchange for bank details and driver’s license numbers.
Frequently Asked Questions (FAQs)
1. How do I know if my tax preparer is legitimate?
Check if they have a PTIN and are listed on the IRS Directory. They should sign your return and offer to explain any deductions.
2. What should I do if I receive a suspicious IRS message?
Don’t click any links. Forward phishing emails to [email protected] and report scam calls to the TIGTA at 1-800-366-4484.
3. Can I recover money lost to a tax scam?
In many cases, it’s difficult. Report the fraud immediately to the FTC, IRS, and your bank. You may be able to recover some losses if you act quickly.
4. Is it safe to use online tax software?
Yes, as long as it’s from a reputable company, kept up to date, and you use strong passwords with MFA enabled.
5. What if my Social Security number is stolen?
File IRS Form 14039 (Identity Theft Affidavit), report to the FTC at identitytheft.gov, and monitor your credit report.
