Reducing Your Risk of Tax ID Fraud

The Internal Revenue Service (IRS) identified approximately $10.6 billion in tax and financial fraud in fiscal year 2025, a year-over-year increase of 15.7%.

But tax fraudsters and financial criminals[BJ3] [BJ4]  are only a few of the thieves who steal names, Social Security numbers (SSN) and other personally identifiable information (PII) in order to file forged tax returns with hopes of getting fraudulent refunds. Identity thieves also target children’s identities since they present a clean slate. When a child’s SSN is attached to a fraudulent tax return, the parents may be denied a tax credit they’re otherwise entitled to claim.

Types of threats to be wary of at tax time

The IRS issued a new list of potential scams people should be aware of during tax season — and year round. These include:

• Social media scams: There’s a lot of bad tax advice on social media regarding taxpayer credits or refund eligibility. Sometimes, these online influencers might suggest taxpayers lie on their tax forms or recommend tax credits that are not real. Other times, their posts are designed to get taxpayers to connect with would-be scammers.
• Phishing and smishing: These social engineering tactics are among the most common used by criminals to steal personal and financial information. They involve the scammer impersonating a trusted individual, favorite business or government employee, aiming to convince the victim to send money, share sensitive information or open malicious links and files.
• Protection for seniors: Criminals often target older adults, particularly those 65 or older, to steal money or extract sensitive personal or financial information. If a scammer successfully convinces them to withdraw retirement funds, it can negatively impact their taxes.

Eight tips to avoid tax fraud

Consider the eight tips below to help you lower the risk of tax fraud.

1. File your taxes early. Most people don’t know their personal data (or children’s PII) has been hijacked for tax identity theft until their tax returns are rejected for using duplicate/previously filed information. Fraudsters file early to collect their fraudulent returns before legitimate taxpayers file. The fraud can go undetected for months — until rejection from the IRS is received.
2. Never send sensitive information via email or text. IRS scammers will often mask themselves with emails or caller IDs that look legitimate. They reach out to request your personal information that will allow them to file a tax return on your behalf. Don’t be fooled: The IRS does not initiate contact with taxpayers electronically, preferring instead to contact individuals by mail.
3. Confirm any requests for information with a phone call. Although a notice in the mail may seem legitimate, it’s relatively easy for fraudsters to set up phony direct mail campaigns and victimize consumers. Always confirm any request by calling the IRS at its toll-free number: 800-829-1040.
4. Choose a trusted and reliable tax preparer. If you or your tax preparer file online, make sure it’s through a secure connection.
5. Hand deliver or securely ship sensitive documents to your tax preparer. Make sure your tax documents, especially W-2 forms and other documentation containing your SSN, get into the right hands. Use Certified Mail or Signature Confirmation to confirm the delivery of your documents at your intended destination.
6. Fill out and submit an IRS Identity Theft Affidavit. IRS Form 14039 (Identity Theft Affidavit) is a fillable form on the IRS website and should be completed if you try to e-file your taxes and they get rejected due to a duplicate filing. Fill it out, print it, attach the form to your paper return and mail everything to the IRS.
7. Check your credit report regularly and at the start of tax season as a natural reminder for an annual review.
8. Consider getting an identity protection PIN (IP PIN). This proactive deterrent is a unique six-digit number only known by the taxpayer and IRS. Its use is designed to stop someone from filing a fraudulent tax return using SSN or individual taxpayer identification number. Any US taxpayers can get an IP PIN, even individuals living abroad.

In addition to helping individuals and families avoid tax fraud, the IRS has specific recommendations for tax professionals. These include reminding them of their legal obligation to have a Written Information Security Plan. They also suggest using security measures like multi-factor authentication to safeguard client tax information.