Protect Yourself Against Fraud This Tax Season

Millions of tax returns were flagged for potential identity issues last year

Tax filing in the U.S. is increasingly becoming digital. According to the U.S. Internal Revenue Service (IRS), 93% of individual tax returns were paperless last year.

The process will only continue moving further in that direction. For example, based on an executive order, the IRS has mostly stopped issuing tax refunds in the form of paper checks; refunds are now made electronically. Additionally, the IRS offers a free online service called Direct Pay, which allows taxpayers to make IRS payments from their bank account. (The IRS is working towards a system in which all tax payments will be required to be electronic.)

While all of this is convenient for a large majority of taxpayers, it also means that scammers are gaining more opportunities to commit fraud—including attempts to intercept refunds or steal personal information for the purpose of committing identity theft. The Taxpayer Advocate Service, an independent organization housed within the IRS, reports that the IRS flagged around 2.1 million U.S. tax returns for potential identity issues in 2025.

Recognize the tactics of tax scammers

Your best defense is to stay knowledgeable. The IRS and the Federal Trade Commission (FTC) are warning consumers about various tax-related fraud schemes that typically pop up at this time of year:

Emails and texts about tax refunds
If you receive an unsolicited text or email regarding your tax refund status, know that it’s a phishing campaign meant to steal the refund and harvest your personal information. According to the FTC, the message appears as if it’s coming from the IRS or a state tax office, stating that your refund claim has been processed or approved. In order to claim the refund, you’re asked to click a link where you enter information like your Social Security number and bank account details.

Don’t click—it’s a scam. Neither the IRS nor state tax offices will contact you by email, text, or social media message to ask for any personal information. To find out the status of a pending tax refund, visit USA.gov.

Fake offers of online assistance
It’s a good idea to set up an IRS online account, which allows you to access your payment history, current balance, and more. However, the IRS cautions taxpayers to watch out for scammers who offer assistance in setting up the account. These fake entities send you a message claiming that the account setup is so complicated, you’ll need their help to complete it. In reality, they’re seeking personal information like your address, Social Security number, or photo identification, for the purpose of committing identity fraud.

Don’t engage. Setting up an IRS online account on your own is relatively simple. If you need assistance, the agency offers a number of free resources, including Frequently Asked Questions.

Phone calls about back taxes
Despite the digital nature of today’s tax system, some tax-related fraud schemes still take place the old-fashioned way: by phone. The FTC reports an increase in phone scams in which victims are told they owe back taxes. Fraudsters using fake organizational names like “Tax Resolution Oversight Department” or “Tax Mediation and Resolution Agency” call and notify you that you haven’t paid your taxes; they offer to connect you with a “tax resolution officer” who can help resolve the issue. Actually, they’re trying to steal your Social Security number or other personal information, or charge you an illegal upfront fee for phony tax relief.

Hang up. Know that the IRS will never make first contact with a taxpayer by phone, only by mail. For trustworthy information about your tax status, visit IRS.gov.

Protect your funds and identity

Here are some tips for avoiding tax-related fraud and identity theft:

Get an identity protection PIN. The IRS offers a free identity protection PIN (IP PIN) service. This unique six-digit number verifies your identity when dealing with the IRS, preventing others from filing a tax return in your name. Once you’ve created an online account with the IRS, you can generate the PIN through your profile page. A new PIN will be created each year for your account; it is to be entered only in tax-preparation software or shared with a trusted tax professional. Note that the IRS will never contact you to ask for your PIN. If you receive a call, text, or email seeking your PIN, it’s a scam.

File taxes early. If criminals wind up with your Social Security number and other personal information as a result of a data breach or successful fraud attempt, they may try to file a false tax return in your name. Stay one step ahead of them: File your return as soon as possible.

Know how the IRS operates. The IRS always uses postal mail as its preferred communication method—not email, text, or phone. Also, it will never use aggressive, high-pressure collection tactics, nor will it request nontraditional payment methods like payment apps, gift cards, or crypto.

Using tax software? Boost your security. If you’re using tax-preparation software like TurboTax, TaxSlayer, or H&R Block, be sure to secure your account by using two-factor authentication. Adding this extra log-in step makes it more difficult for scammers to access your account, even if they have your username and password.

What to do if you’ve become a victim of tax fraud

If a scammer has gotten hold of your Social Security number or other sensitive personal information and has used it to commit tax-related fraud in your name, that’s identity theft. The first thing you should do is contact the IRS. The agency offers a resource called Identity Theft Central, designed to help consumers, tax preparers, and businesses deal with the effects of tax-related identity theft. Note that as part of the recovery process, you’ll need to file an Identity Theft Affidavit (IRS tax form 14039) with your tax return for the affected year.