Nashville, TN – As tax filing season gets underway, Better Business Bureau (BBB) is warning consumers to be on the lookout for tax scams. These schemes often involve criminals impersonating the Internal Revenue Service (IRS) or using stolen personal information to fraudulently claim tax refunds. Tax scams occur when scammers obtain sensitive information—such as a Social Security number, address, and date of birth—and use it to file a fraudulent tax return before the legitimate taxpayer has a chance to file. In many cases, victims only discover the fraud when their own tax return is rejected because one has already been submitted in their name.
“Tax identity theft can be difficult to detect because many victims don’t realize what has happened until they try to file their taxes,” said Robyn Householder, President and CEO. “By that time, the scammer may have already collected the refund.”
How Tax Scams Work
Scammers typically gather personal information through a variety of tactics, including phishing emails, fraudulent text messages, and fake websites designed to capture sensitive data. In some cases, criminals gain access to information through data breaches or compromised tax preparation services.
Once the information is obtained, the scammer files a tax return early in the season and claims the refund. Victims often receive notice that their legitimate tax filing has been rejected due to a duplicate return.
Other forms of tax fraud include filing returns using the identities of deceased individuals or claiming children as dependents without authorization.
Warning Signs of Tax Identity Theft
Consumers should watch for these potential red flags:
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Notices indicating that more than one tax return was filed using their Social Security number
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Notifications of income from an employer they never worked for
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Messages stating taxes are owed for a year they never filed
If any of these situations occur, consumers should contact the IRS directly to verify the notice.
Tips to Avoid Tax Scams
BBB recommends the following steps to help protect against tax-related identity theft:
File early: Filing your tax return as soon as possible reduces the chance that a scammer can submit a fraudulent return first.
Protect your Social Security number: Only share your SSN when necessary and with trusted organizations.
Avoid unsolicited messages: Do not click links in unexpected emails or text messages claiming to be from the IRS.
Secure tax documents: Store electronic tax forms and financial documents on password-protected devices.
What to Do if You’re a Victim
If you believe you are a victim of tax identity theft:
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Contact the IRS and request assistance from the Taxpayer Advocate Service, an independent organization within the IRS that helps taxpayers resolve issues and protect their rights.
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Report identity theft at IdentityTheft.gov if your Social Security number or Individual Taxpayer Identification Number (ITIN) has been stolen.
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File a complaint with the Federal Trade Commission (FTC).
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Report the scam to BBB through BBB Scam Tracker to help warn others in the community.
For more information about scams and how to avoid them, visit BBB.org.
