Tax scams through the years and what to know this year

Tax scams rarely stay the same for long. Each filing season brings new tactics designed to trick taxpayers into revealing personal information or claiming refunds to which they are not entitled. In recent years, fraud linked to unemployment systems, stimulus payments and identity theft took many taxpayers by surprise. Some people didn’t discover the problem until their legitimate tax return was rejected or unexpected tax forms arrived in the mail.

Two years later, promoters marketed confusing credits, such as the Employee Retention Credit, to businesses that didn’t qualify, charging fees for filing improper claims. By 2025, misleading guidance will be widely spread on social media, encouraging taxpayers to misuse forms like 4136 or modify salary information through consumer tax software.

Each of these scams is based on confusion around tax rules and filing systems. Understanding how they work can help you spot red flags before you submit your return this year.

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IRS WARNS TAXPAYERS ABOUT NEW MAIL-IN REFUND SCAM

2021 Tax Scams: Unemployment Fraud and Stimulus Payment Theft

In 2021, identity theft linked to unemployment programs created widespread tax problems. Criminals used stolen Social Security numbers to file benefit claims through state systems. Because unemployment income is taxable, Form 1099-G notices were sent to victims for payments they never received. The IRS advised taxpayers not to report fraudulent income and to contact the issuing state agency to correct records.

They also signed up for stimulus payments. Scammers filed early tax returns using stolen personal data to claim recovery refund credits or redirect refunds. When legitimate filers later submitted their returns, some were rejected because a return linked to their Social Security number had already been processed. Federal agencies, including the FBI, warned of high levels of unemployment fraud during this period. The IRS also encouraged taxpayers to register for an Identity Protection PIN, which adds an additional layer of verification when filing.

Are you worried that your SSN has been stolen? Many tax fraud cases begin with data extracted from violations. You can run a free scan using our top Identity Theft Protection pick to check if your information appears in known data breach logs. The scan searches for matches linked to your email address and displays the results in real time. See my tips and top picks for the best identity theft protection at Cyberguy.com.

2023 Tax Scam Warning: Ghost Preparers Filing Fraudulent Returns

The IRS later noted an increase in returns prepared by so-called ghost preparers. These people charge fees to prepare tax returns but refuse to sign them or include a valid preparer tax identification number. Under federal tax rules, anyone who is paid to prepare a return must sign it. When a preparer fails to do so, the taxpayer, not the preparer, remains responsible for the filing.

In many reported cases, ghost preparers inflated tax credits, fabricated income figures, or altered withholding amounts to generate larger refunds. Some charged fees based on the size of the refund, creating an incentive to push questionable claims rather than follow tax rules.

Tax scams in 2025: tax ‘tricks’ on social media and inadequate declarations

By 2025, misleading tax advice began to circulate widely on short video and social media platforms. Some posts encouraged people to file Form 4136 to claim a fuel tax credit for gasoline used in personal vehicles. The IRS says this credit applies only to certain commercial and off-highway uses, not daily driving. Filing the form incorrectly can trigger an IRS review.

Other posts instructed taxpayers to modify wage or withholding numbers within consumer tax software to inflate refund amounts. The IRS has repeatedly warned that taxpayers remain responsible for the accuracy of their returns, regardless of where the notice originated. Submitting incorrect income information or claiming unsupported credit can delay refunds and potentially result in penalties.

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IRS Warning for 2026: Tax Scams Expected This Filing Season

The IRS recently released its “Dirty Dozen” list of 2026 tax scams that it expects to circulate during filing season. Phishing and text message scams remain among the most common threats. Scammers often impersonate the IRS or tax software companies and claim there is a refund or account issue in an attempt to collect Social Security numbers, banking details, or login credentials.

The agency emphasizes that it does not initiate contact via email, text messages or social media to request sensitive information. The 2026 list also includes phantom preparers and misleading tax advice shared online, including content promoting inappropriate credit claims. Identity theft refund fraud remains part of the law enforcement landscape as criminals file returns using stolen data before legitimate taxpayers.

How to protect yourself from tax scams

Some simple habits can reduce your risk during filing season.

1) Monitor your personal data and credit activity

Identity theft refund fraud remains a major concern. Criminals sometimes file tax returns using stolen personal information before the legitimate taxpayer files theirs. Because many tax fraud cases begin with personal data exposed in breaches, keeping track of where your information appears online can help you spot warning signs sooner.

Identity theft services scan records of known data breaches for matches linked to your email address, Social Security number, and other identifiers.

These services also monitor credit files at the three major U.S. credit bureaus and alert you to new accounts, hard inquiries, or other changes to your credit report. If suspicious activity appears, members receive real-time alerts as soon as it is detected.

See my tips and top picks for the best identity theft protection at Cyberguy.com.

2) Only work with legitimate tax preparers

Anyone paid to prepare a tax return must sign it and include a valid Preparer Tax Identification Number. Avoid preparers who promise unusually large refunds or refuse to sign your return.

3) Ignore unexpected messages from the IRS

The IRS does not contact taxpayers via email, text messages, or social media to request personal information. Messages claiming to be from the IRS and requesting confidential information are often scams.

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4) File your return early

Identity thieves often attempt to file fraudulent tax returns before the real taxpayer. Filing early in the season can reduce that risk.

5) Consider an IRS Identity Protection PIN

This six-digit code adds an extra layer of security to your tax return. Without it, criminals cannot file a return using their Social Security number.

What to do if someone files a tax return in your name

If the IRS rejects your return because one was already filed using your Social Security number, you may need to complete IRS Form 14039, Affidavit of Identity Theft. The IRS may also require identity verification before processing your return. In some cases, affected taxpayers must file a paper return while the agency investigates the alleged fraud.

Kurt’s Key Takeaways

Tax scams change every year, but the pattern remains the same. Criminals look for confusion around tax rules, new programs, or trendy online tips and use that uncertainty to push fraudulent claims or steal personal information. The best protection is to slow down before applying. Check tax advice through trusted sources like the IRS, work only with legitimate tax preparers, and keep a close eye on your personal data and credit activity. A little caution during filing season can help avoid months of headaches if your return is flagged for fraud.

Have you ever received a suspicious tax message, questionable filing advice online, or discovered a tax return filed in your name? Let us know by writing to us at Cyberguy.com.

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