Tax Scams Exposed: How to Protect Yourself This Holiday Season

With holiday season just around the corner, while most of us are busy trying to maximize deals on Black Friday, scammers are busy trying to empty our bank accounts. These fraudsters use every trick in the book—from fake IRS threats to promises of huge refunds.

The good news? Spotting their scams isn’t all that hard once you know the signs. Here’s how to stay one step ahead and keep your money safe.

Red Flags of a Tax Scam

Tax scammers are crafty, often promising huge refunds or making dire threats. Here’s what you need to watch out for:

“Too Good to Be True” Refunds

If someone tells you they’ve found a way to get you an enormous refund, be wary. Social media is full of bad tax advice that can land you in trouble by encouraging you to falsify forms or claim credits you aren’t eligible for.

Demands and Threats

Scammers love to use fear as a tactic. If someone threatens you with arrest, deportation, or immediate legal action unless you pay up right now, it’s a scam. The IRS doesn’t operate like a collection’s agency.

Suspicious Links

If you receive an email or text with a strange-looking link claiming to be from the IRS, don’t click it. Scammers can direct you to fake sites designed to steal your personal information. Stick to irs.gov or reach out to your accountant for all your tax questions.

No Time to Appeal

A surefire way to spot a scammer is if they don’t let you question or appeal what they claim you owe. The IRS has a process for disputing charges, so anyone who pressures you to act immediately is likely trying to defraud you.

How the IRS Actually Contacts You

Let’s set the record straight: the IRS doesn’t ambush people with phone calls or aggressive emails.

Here’s how they really reach out:

• Mail: The IRS typically contacts you by U.S. mail first. If you get a letter, it should include a letter number or notice you can verify online.
• Phone Calls: While phone calls are rare, they might happen if you’re in the middle of an audit or they need to verify information. But usually, you’ll get a letter first.
• Email or Text: The IRS will only email or text you if you’ve specifically agreed to it. If you haven’t, don’t trust any messages claiming to be from them.
• Social Media: The IRS won’t reach out to you through social media DMs. If someone contacts you this way claiming to be the IRS, it’s a scam.

Common Tax Scams to Watch Out For

Scammers have a variety of schemes up their sleeves, but here are a few of the most common:

• Fake Charities: Fraudsters posing as charitable organizations prey on your generosity. Always verify before donating, especially after disasters.
• COVID-19 Scams: The pandemic saw an increase in fake schemes targeting people for their Employee Retention Credits (ERC). Don’t fall for aggressive marketing promising you credits you don’t qualify for.
• Clean Energy Credits: Scammers are capitalizing on the rise of clean energy by falsely advising people on tax credits related to it. Stay informed, and only trust credible sources.
• Disaster Fraud: After a catastrophe, scammers may claim to help you get tax relief or refunds. Verify any charity or agency before engaging with them.
• Dishonest Tax Preparers: Watch out for preparers who won’t sign your return, falsify information, or take a cut of your refund. They’ll disappear faster than you can say “IRS audit.”

Stay Safe and Informed

Avoiding tax scams doesn’t have to feel like preparing for a family feast—stressful and full of surprises. With the right knowledge, you can spot red flags and stick to official IRS communication channels, keeping your information safe and scam-free. And if you’re ever unsure—even if a real IRS audit letter lands on your doorstep—reach out to your accountant. We’re here to help you sort the facts from the stuffing. Stay vigilant, and breeze through tax season as smoothly as holiday gravy!