Tax season is underway, and with it comes an uptick in scams, with fraudsters using increasingly sophisticated tactics to trick taxpayers into handing over personal information, Money, or both.
“Scammers are relentless, and they use the guise of tax season to try tricking taxpayers into falling into a variety of traps. These red flags can lead to everything from identity theft to being misled into claiming tax credits for which they’re not entitled,” Terry Lemons, IRS communications senior adviser, said in a news release.
Scammers are now exploiting advanced technologies like Artificial Intelligence (AI) to make their schemes more convincing. Here’s what you need to know to stay safe this tax season.
1. Impersonation scams
Fraudsters often pose as IRS or Canada Revenue Agency (CRA) agents, threatening victims with arrest, deportation, or heavy fines if they don’t pay a supposed tax debt immediately. These calls may appear to come from official government phone numbers, thanks to caller ID spoofing. Scammers may also send convincing letters or emails that mimic government correspondence.
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2. AI-enhanced phishing emails and texts
Scammers are now using AI to craft highly personalized phishing emails and text messages. These messages may reference your name, employer, or even recent financial transactions, making them seem more legitimate. Often, they include malicious links that steal sensitive information.
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3. Tax preparer fraud
Some scammers pose as tax professionals to steal Social Security numbers, banking details, or refunds. These fake preparers may promise huge refunds, charge excessive fees, or file your return without your knowledge.
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4. Fraudulent refund scams
In this scam, criminals steal your Social Security number (or Social Insurance Number in Canada), file a fraudulent return in your name, and claim your refund. Victims often don’t realize they’ve been targeted until they attempt to file their legitimate return.
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5. “Ghost” tax preparers
Ghost preparers refuse to sign your tax return, often promising low fees upfront but then demanding additional payments after filing. Since they don’t sign your return, the responsibility for errors falls entirely on you.
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6. “Pay now, or else”
Scammers often target older adults by exploiting fears of tax debts or legal action. Fraudsters may pressure seniors by claiming their Social Security or Pension benefits will be suspended unless immediate payment is made. AI-driven voice-cloning scams have also emerged, where scammers mimic the voice of a loved one claiming urgent financial help for “tax issues.”
Protect yourself:
If you believe you’ve encountered a tax scam, take the following steps:
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