March 5, 2024

Procrastination can be costly. Especially when it comes to your federal income tax return. With nearly a quarter of U.S. taxpayers waiting to file their taxes until the last minute, bad actors see another opportunity to line their wallets. Crooks hope to pocket your refund before you file taxes. 

You can avoid tax refund scams by first understanding how they work.  

What is a tax refund scam?

A tax refund scam is a type of financial fraud where crooks impersonate IRS employees in an effort to trick taxpayers into sharing Social Security numbers (SSNs) and other private information. Fraudsters use this data to file phony returns and steal tax refunds. Victims often become aware of the scam when the IRS tells them they cannot submit their return because someone else with the same Social Security number has already done so for the tax year. 

5 Signs of a Tax Refund Scam

Tax refund scams typically begin with phishing attempts using emails, phone calls, or text messages. Fraudsters are known to use spoofing technology so caller ID displays “IRS” or “Internal Revenue Service.” Fake emails may include “IRS” in the address but do not end in “.gov.”

Other red flags include:

  1. Phone calls from IRS representatives claiming you need to confirm your SSN and direct deposit information they have on file.
  2. Unexpected texts or emails that include the words “tax refund update” or “check your tax refund status.” These typically send you to look-a-like IRS websites where you must enter sensitive personal data to view the phony update.
  3. Social media private messages that encourage you to click on a link to live chat with an IRS agent and learn about how you can have a refund direct deposited sooner.  
  4. Communication that claims your refund will be withheld if you do not verify your SSN and bank account details by entering them at a website link the sender provides.
  5. Pre-recorded messages that express an urgency to speak with you about “an important tax matter.”

Do not provide confidential information in response to these attempts no matter how persistent the emails, texts, or phone calls. 

Protect Yourself from a Tax Refund Scam

To avoid falling victim to tax refund scams, it is important to avoid sharing personal information unless you initiated the contact. Do not click on hyperlinks from suspicious texts or emails to check the validity of the notification. Remember, the IRS does not initiate contact via text, email, or telephone.

If the IRS needs to reach you, they will send a letter via the United States Postal Service. However, since scammers are now sending taxpayers fake IRS notifications in the mail, be sure to confirm whether the agency actually sent it. Here’s how to quickly verify IRS letters sent via U.S. mail. 

  • Find the notice or letter number located on the top or bottom right-hand corner of the IRS notification.
  • Enter it in the Notices & Letters Search bar on the official IRS Understanding your IRS notice or letter webpage.
  • If your entry does not return a result, follow the next steps on the webpage.

You can also double-check the validity of an IRS notification by speaking with a representative at 1-800-829-1040.

The IRS encourages taxpayers to visit their official webpage, Where’s My Refund, to confirm the status of a federal income tax refund. 

Where to Report Suspected Tax Refund Scams

If you believe someone is trying to steal your tax refund, report it to the IRS Identity Protection Specialized Unit at 1-800-908-4490. Visit the IRS website for more information.