Tax Scams are on the Rise: Protect Yourself from Evolving Threats
TEMPE, Ariz. and PRAGUE, Feb. 25, 2025 /PRNewswire/ — The landscape of tax season has changed dramatically. Artificial intelligence is now being used by fraudsters, creating sophisticated scams that can be difficult to detect. This year, taxpayers face unprecedented challenges in safeguarding their personal and financial information. Scammers are using increasingly convincing methods like AI-generated voice scams to impersonate IRS agents or tax professionals. With the ability to realistically mimic voices, taxpayers must be vigilant to avoid being tricked.
According to a recent study conducted by LifeLock, a leader in identity theft protection and part of Gen™ (NASDAQ: GEN), 56% of people have already encountered AI-powered tax scams featuring realistic voices.
“We’re in a new era of tax scams, where AI gives fraudsters an unprecedented advantage,” notes Ian Bednowitz, General Manager of LifeLock. “The challenge isn’t just that these scams exist—it’s that they’re becoming nearly indistinguishable from legitimate communications. This tax season, education, verification, and the right security tools are the best defense against these threats.”
In 2024, the IRS Criminal Investigation unit uncovered over $9.1 billion in tax fraud and financial crimes, nearly double the $5.7 billion detected in 2022. With 81% of people reporting financial impacts after falling for a tax-related scam, these schemes pose serious risks.
Here’s what to look out for:
W-2 Phishing Scams
These scams are now more convincing than ever because of AI. Scammers are using AI-generated emails, voice deepfakes, and even chatbot-assisted conversations to impersonate senior executives, targeting HR and finance departments. They tailor these messages with company-specific details to trick people into handing over sensitive tax documents like W-2s. Scammers may then file a fraudulent tax return using a stolen W-2 to steal the refund or use the personal information on the W-2, such as a Social Security Number, for further identity theft.
Disaster Relief Fund Tax Scams
While it’s common to see fake donation sites or insurance scams after natural disasters, LifeLock has noticed a rise in scams during tax season too. Fraudsters exploit IRS tax extensions for individuals affected by disasters to impersonate officials and steal sensitive data or payments. The urgency of relief efforts makes both donors and victims vulnerable to these schemes.
Offer in Compromise (OIC) Scams
While the IRS does offer a legitimate program called Offer in Compromise to help taxpayers settle their debts, scammers exploit this by making false promises of debt relief. Leveraging AI, fraudsters deploy large-scale robocalls, personalized email campaigns, and even deepfake videos of supposed “tax professionals” endorsing their services. These scams prey on vulnerable people, convincing them to pay high upfront fees for services that never materialize.
Protecting Yourself from Tax Scams
Cybercriminals are using increasingly sophisticated tactics, making it more critical than ever to stay alert. Follow these recommendations to protect your information.
- Use Reputable Tax Preparation Services: Make sure your tax preparer has a valid Preparer Tax Identification Number (PTIN).
- Verify Communications: The IRS will never contact you via email, text, or social media asking for personal or financial information. If you think the IRS or your tax preparer is trying to reach you, call them directly instead of replying to the message.
- Be Cautious with Personal Information: Avoid sharing any sensitive data over the phone or online unless you are certain of the recipient’s identity.
- Monitor Financial Accounts: Check your bank and credit accounts regularly for any unauthorized transactions.
- Report Suspicious Activity: If you think you’ve been targeted by a tax-related scam, report it to the IRS and the Federal Trade Commission (FTC) immediately.
Protect yourself from fraud with services like LifeLock. Using scam detection like Norton Genie, can help flag potential scams before you become a victim.
