Tax season is a productive time for fraud because it combines large sums, tight deadlines and a government agency most people are slightly afraid of. Almost all of it fits a small number of patterns.
Ghost preparers
A ghost preparer takes your money, prepares your return and does not sign it. The return is presented as self-prepared, which leaves you holding responsibility for whatever is on it and leaves no trail back to them.
Any paid preparer must have a PTIN and must sign. The rest of the pattern is consistent: a fee quoted as a percentage of the refund, invented deductions or dependents to inflate it, and a request to route the refund to an account you do not control. By the time the notice arrives, the storefront has closed for the season.
The IRS publishes guidance on choosing a tax professional, and an abusive preparer can be reported on Form 14157.
Impersonation calls and texts
The classic version: a caller says you owe money and will be arrested unless you pay immediately, ideally in gift cards, wire transfer or cryptocurrency. Caller ID may show a Washington DC number. Newer versions arrive as text messages or emails with a link to a convincing fake login page.
The IRS initiates contact by post. It does not text about refunds, it does not email links, it does not demand a specific payment method, and it does not threaten arrest on a phone call. If you are unsure whether a notice is real, look up the notice number on the IRS website and call the number published there, never the number in the message. Report impersonation to the Treasury Inspector General for Tax Administration and to the Federal Trade Commission.
Refund identity theft
Someone files a return using your Social Security number early in the season and takes the refund. You discover it when your own return is rejected as a duplicate. Recovery works, and it is slow: Form 14039 to report the theft, then a manual process that often takes months.
The single most effective protection is an Identity Protection PIN. It is a six-digit number, reissued every year, without which no electronic return using your Social Security number can be filed. It is available to any taxpayer who requests one, not only to previous victims, and it takes a few minutes to set up.
Filing early helps too, for the plain reason that the first return filed is the one that processes.
Credit-mill schemes
Every year a scheme circulates promising large refunds from a credit most people have never heard of: fabricated household employee wages, self-employment credits that do not apply, inflated fuel tax credits, or a made-up "self-employed tax credit". The pitch spreads on social media and through preparers who charge a share of the refund.
The IRS collects the current crop in its annual Dirty Dozen list. Claims of this kind are usually frozen before payment, and when they are not, the money is recovered with penalties. The person who signed the return is the person on the hook, not the promoter.
Offer in compromise mills
Advertising that promises to settle tax debts for "pennies on the dollar" is selling a real programme with fabricated odds. Offers in compromise are accepted when the formula supports them, and a firm cannot change your income or assets. Before paying anyone, run the free IRS pre-qualifier, which will tell you in ten minutes whether you are in the range at all.
Charity and disaster scams
After any widely reported disaster, fake charities appear with names close to real ones and collect "deductible" donations that are neither charitable nor deductible. Before giving, check the organisation in the IRS Tax Exempt Organization Search, and give to the charity directly rather than through a link in a message.
Practical security for your own documents
- Use a preparer's secure portal rather than email for anything containing a Social Security number.
- Enable two-factor authentication on the email account your tax documents pass through. It is the master key to everything else.
- Shred paper you no longer need, and know how long you actually need it.
- Check your Social Security earnings record annually at ssa.gov. Wages you did not earn appearing there is an early sign of identity theft.
If it has already happened
Report identity theft at IdentityTheft.gov, which produces a recovery plan and the affidavit you will need. File Form 14039 with the IRS, place a fraud alert or freeze with the credit bureaus, and file your return on paper if it will not e-file. If the case stalls, the Taxpayer Advocate Service can help at no cost. Working with a credentialed preparer from our directory is worthwhile here: identity theft cases involve paperwork most people only see once.