In the U.S., a record $394 million was lost to government impersonation scams in 2023, up from $241 million the year prior. The bulk of these scams happen during tax season when scammers pretend to be IRS agents and deploy sophisticated scams across all digital platforms.
The reverse search company Social Catfish has released a report called Rise of Tax Season Scams. This is based on FBI IC3 data released in March 2024 and trends from millions of users on its website.
The report revealed the ten states that lost the most money in 2023 were: California ($88.3 million), Kansas ($44 million), Florida ($27.1 million), New York ($26.5 million), Massachusetts ($22.2 million), Texas ($17.1 million), Washington ($15.05 million), New Jersey ($15.02 million), Maryland ($14.7 million), and Pennsylvania ($12.6 million).
What is interesting is how similar many of the scams were. In terms of similar patterns, there are five key areas.
TurboTax Scams
Scammers send emails pretending to be from TurboTax, asking recipients to update their account information or claiming there is an issue with their tax return. In another version of this scam, fake websites that mimic the official TurboTax website trick victims into sharing personal and financial information.
How to avoid this?
Avoid third-party websites or advertisements offering TurboTax at a discounted price. Go directly to turbotax.intuit.com to use their software.
Fake Accountant
Scammers pretend to be a CPA who promises unusually high tax refunds at exceptionally low prices. Of course, payment for these services are due up front, and once the “accountant” gets paid and has your personal information they disappear.
How to avoid this?
Perform a reverse search to confirm the identity of the tax preparer using their email, phone number, or photo. If something seems too good to be true, it is.
Spoofing IRS Phone Call
Criminals call victims using a ‘spoofing’ technique which makes the number appear as though it is coming from the IRS. They claim the victim owes money for unpaid taxes and threatens to fine them or arrest them if it is not paid.
How to avoid this?
Visit IRS.gov directly to make any payments.
Unclaimed Refund
Scammers send emails with the IRS logo telling victims they are owed more money and can immediately claim their tax refund by clicking a link and filling out the information. This is a ‘phishing link’ designed to steal personal information.
How to avoid this?
The IRS never initiates contact by email, text messages or social media.
Employee Retention Credit
The ERC is a tax credit for businesses that retained employees during COVID-19. Scammers post ads on social media claiming they can help business owners – even those who are not eligible – get their ERC credit right away.
How to avoid this?
Use a trusted tax preparer. Do not respond to an unsolicited third party.
