How to protect yourself from tax season scams

AUSTIN, Texas - A new year and new tax season brings new opportunities for tax-related scams.

"We see this fear tactic play out every time this part of the year," said Jason Meza, senior regional director for San Antonio, Better Business Bureau serving the Heart of Texas.

Scammers often instill and capitalize on fear of missing deadlines, fear of losing money and fear of breaking the law.

It plays out in a variety of ways during tax season.

"BBB typically sees an increase in scam reports, imposter fraud approaches, people getting phone calls, texts and emails claiming they have an outstanding debt, claiming they need to settle something quickly before an action is taken against them," said Meza.

And there may be lingering confusion post-pandemic. 

"During the pandemic, we saw tax deadlines get moved, things get stretched around and a lot of confusion," said Meza. "I think scammers play on that confusion very well."

One example of a possible scam - receiving a phone call where the caller claims to be with the IRS and demands payment. The IRS will almost always mail a letter, and they won't demand immediate payment without allowing the opportunity to appeal.

Ahead of filing, watch out for scammers posing as tax preparers - also referred to as "ghost preparers." They will claim legitimacy and may promise an extra large tax return.

"With the advent of social media, we also see accounts being hacked and people getting served friend requests or friend suggestions saying, ‘You should get on to this great tax program or there's a tax break you're missing, click here,'" said Meza.

According to the BBB, in 2021, there were 52,000 reports to the IRS of tax-related scams and $1.6 billion lost. 

Meza said the best action to take to avoid fraud is to start the filing process early - before scammers have a chance to steal information or money.

A newer feature can also provide enhanced security. Taxpayers can now request an IPP (Identity Protection PIN) when filing. Even if a scammer obtains a Social Security number, they would also need the IPP to file someone else’s tax return.

"I think some of the main things to remember are the IRS is never going to demand payments, they are not going to threaten to arrest you or deport you, and watch for those unexpected calls about any refunds," said Meza. "And they're not going to initiate contact through text or social media - they will mail you first."

For more tips from the BBB, click here.