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.

Common scams to watch for

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.

Protect yourself:

• Remember that legitimate tax agencies will never demand immediate payment via gift cards, wire transfers, or cryptocurrency.
• If you receive a suspicious message, contact the IRS (1-800-829-1040) or CRA (1-800-959-8281) directly to confirm whether they attempted to reach you.

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.

Protect yourself:

• Be cautious with unexpected emails or texts that claim to be from tax authorities or financial institutions.
• Avoid clicking on links; instead, visit official websites by typing the URL directly into your browser.

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.

Protect yourself:

• Choose a reputable tax preparer with proper credentials. The IRS Directory of Federal Tax Return Preparers and the CRA’s authorized e-file provider list can help verify legitimate services.
• Never sign a blank tax form or allow your refund to be deposited into a third-party account.

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.

Protect yourself:

• File your taxes early to reduce the risk of someone filing on your behalf.
• Consider setting up an IRS Identity Protection PIN (IP PIN) or a CRA My Account profile for added security.

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.

Protect yourself:

• Make sure your tax preparer signs your return and provides their Preparer Tax Identification Number (PTIN) in the U.S. or proper credentials in Canada.

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:

• Authenticate calls from “officials” by contacting the tax agency directly.
• Establish a family code word to verify emergency calls.
• Be wary of high-pressure tactics demanding immediate payment or private financial details.

What to do if you’re targeted

If you believe you’ve encountered a tax scam, take the following steps:

• In the U.S.: Report the incident to the IRS at IRS.gov and the Treasury Inspector General for Tax Administration (TIGTA). Forward phishing emails to phishing@irs.gov.
• In Canada: Report the scam to the CRA at Canada.ca and the Canadian Anti-Fraud Centre.
• Monitor your credit report and consider placing a fraud alert on your file.

More on preventing scams and fraud

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David Cravit SuperAging News

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