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Tax season is a busy time of year marked by paperwork and deadlines. Unfortunately, the tax season rush also brings scammers looking to take advantage of others.

Thieves and fraudsters will often pose as government agencies, tax preparers, or even third-party helpers. No matter what disguise they use, their goal remains the same: tricking people into sharing personal or financial information.

By understanding how tax scammers work and the tactics they use, you can protect yourself and your finances. Below are some common types of tax season fraud. We will also discuss warning signs of these scams and how to avoid them.

Smishing and Vishing, Now Powered by AI

Tax season scammers primarily operate by utilizing phishing tactics. That is, they use messaging platforms like texting and email to pose as trusted entities and trick people into doing what they want.

In today’s digital landscape, phishing can be further broken down into two sub-categories:

• Smishing is the practice of sending fraudulent text messages designed to trick users into clicking a link or sharing personal information.
• Vishing is when a scammer places a phone call and poses as someone from an official-sounding organization to collect sensitive information.
  

The key difference between these two fraud tactics is how they are delivered. Smishing involves using a messaging app, email, or a social media platform's direct message feature. Meanwhile, vishing involves phone calls and video messaging.

Scammers have started using generative AI to craft believable messages, likenesses, and voices that trick people into falling for their schemes. Consequently, it is much more difficult to distinguish a scam message now than it was just a few years ago.

In other words, the tried-and-true methods of finding spelling and grammar errors in a message may not be enough to identify a scammer in the open.

Common Smishing and Vishing Warning Signs

While scammers have access to technology that may make it hard to identify fraud at first glance, you can still fight back. If you can identify the warning signs and exercise healthy skepticism, you can confidently protect your personal information.

Remember: fraudsters are trying to get you to do something that you normally wouldn’t do, which is share financial information, passwords, or payment details.

It’s necessary to be familiar with common ways scammers might try to get you to share this information, and to stop them in their tracks once you recognize their tactics.

During tax season, avoid messages that claim:

• There is an issue with your tax return
• You owe an immediate payment
• You are eligible for a special refund
• Your identity must be “verified” to process your return
  

The contents of these messages may also direct you to click on a link or call a number. These avenues may lead you to a suspicious website or a caller that may try to collect sensitive information or get you to initiate a financial transaction.

One telltale sign of a potentially fraudulent message is its creation of a sense of urgency. The contents of a message, call, or voice mail may claim that something is wrong and that you must act quickly to avoid an unwanted outcome. By exploiting this fear, scammers try to get recipients to act before verifying the request.

When in doubt, always exercise healthy skepticism. Avoid the impulse to follow a request and take a second to verify any messages you receive. Taking that extra step can help you stop a scam attempt in its tracks.

Remember that legitimate government agencies typically do not contact people through unsolicited texts, emails, or threatening phone calls demanding immediate payment. Usually, the IRS will first try to contact you by direct mail through the United States Postal Service.  

When in doubt, contact these agencies directly to verify any messages. The IRS website offers online tools and resources that provide their contact information, including what to do if you suspect a scam.

Other Tax Scam Tactics To Recognize

Fraudsters will try to assume identities other than those of government agents. During tax filing season, thieves employ a variety of tactics. Being familiar with these schemes can further protect you and your financial information. We’ll go over a few more now.

Urgent payment demands. First, you may receive texts, emails, or phone calls demanding immediate payment to avoid fines, legal action, or arrest. The message may insist that you use an unusual payment method to avoid an unwanted outcome. Be wary of messages that demand the following payment methods:

• Gift cards
• Prepaid debit cards
• Cryptocurrency
• Wire transfers
  

“Unbelievable” refund offers. Some scams may make big promises of significant refunds or tax credits that require you to submit personal information by clicking on a website link or using a third-party service. These kinds of scams are common on social media, where it can be difficult to parse a source’s legitimacy on a constantly refreshing feed. If an offer seems too good to be true, it probably is.

You Can Stop Scammers in Their Tracks

Tax season scams evolve each year. However, they often rely on the same core strategies: urgency, impersonation, and requests for information. When you know to be on the lookout for the common warning signs, it’s much easier to avoid getting scammed.

Remember to take a few simple precautions:

• Verify unexpected messages
• Work with trusted professionals
• Avoid suspicious links
• Never divulge sensitive information
  

By taking your time and recognizing common warning signs of scams, tax time becomes much less stressful. If you ever suspect you’ve encountered a scam, report it to the authorities and monitor your financial accounts for unusual activity.

First Florida is committed to helping you stay SAFE during tax filing season. To learn how to keep your personal information and finances secure, visit our Scam and Fraud Education page.