Tax season is a prime time for scams. IRS uncertainty could add to the issues this year

There's a lot of information (and money) on the table during tax season. That also makes it a prime time for scams.

Year-round, fraudsters may use a handful of common tactics to try to steal your identity, money or other sensitive information. As you prepare your annual tax return, due April 15, experts stress it's important to be extra vigilant.

This year, scammers might take particular advantage of uncertainty stemming from recent workforce cuts impacting thousands of jobs at the U.S. Internal Revenue Service. These layoffs and the potential for even more widespread reductions also raise questions about resources, including the IRS's bandwidth to respond to scams reported by consumers.

Here's what to know about tax scams and how to stay safe:

Identify the signs of tax scams

Tax scammers may try to reach you in a number of different ways — from lookalike emails, texts or phone calls impersonating the IRS to unsolicited social media offers that promise a suspiciously high refund. But there are a handful of common red flags to keep an eye out for, including:

— Sense of urgency

— Isolation tactics or threats

— Promises of a big payday

— Suspicious website links

Cybersecurity experts stress that scammers prey on emotion — and will often try to evoke fear or uncertainty. Many tax scams will ask you to act fast or click on a malicious link right away. Others will make you think you did something wrong, going as far as threatening an arrest if you don't respond. Scammers may also isolate you from contacting others, such as a trusted accounting professional or even a family member.

Many tax scams also advertise big payouts, but at a price. Some "ghost” preparers, for example, will charge you for preparing your tax return — often with promises of maximizing your refund — but never sign it. They may then file a fraudulent return in your name, with an inflated income or fake deductions to boost the refund, and switch the bank account listed to claim your money.

The IRS will never initiate contact via email, text or social media with requests for your personal information — and urges consumers to only use trusted, accredited tax professionals if you need help preparing your return. Those who have fallen victim to scams are also encouraged to report them. You can find more information on the agency's official website.

What's different this year?

Tax scams can be all the more convincing if they meet the moment. And this year, experts warn that cyber criminals or “social engineers” might take particular advantage of uncertainty around the IRS cuts.

“Uncertainty is probably one of the biggest motivating emotions that social engineers take advantage of,” said Dave Chronister, a prominent “ethical hacker” and CEO of Parameter Security, noting that scammers might use news of these cuts and impersonate the IRS to falsely promise taxpayers “new” ways of filing.

Similar tactics emerged during the height of the COVID-19 pandemic and following legitimate rounds of federal aid — with some scammers making false claims about additional stimulus checks, for example.

All it takes is just “a little bit of common knowledge” to “nudge you” into trusting them, Chronister explains.

Beyond how scammers use the news, the IRS workforce cuts could slow the agency's ability to actually respond to scams, Chronister and others note. As a result, malicious websites or predatory social media campaigns may not be taken down as quickly — and victims of fraudulent returns could have to wait longer for answers.

“There is potential for reduced oversight,” said Chris Pierson, chief executive of cybersecurity firm BlackCloak. “If you have less individuals to be proactive within an agency that is housing, I mean, an amazing treasure trove of data and information — that obviously is concerning ... (and could) create a riskier environment for the consumer.”

Asked for comment, the IRS pointed to its “Dirty Dozen” list of common tax scams to watch out for this year, among other steps taxpayers can take to protect themselves from identity theft and fraud. But the agency did not immediately comment on whether recent or future workforce cuts would impact its enforcement resources.

Scams are also becoming more sophisticated, most recently thanks to the rising adoption of generative artificial intelligence. Experts warn that this technology is being used create “hyper-realistic” phishing messages, including video or audio deepfakes, and can allow scammers to target more people at once through automation.

Pierson also warns of the fallout from recent high-profile data breaches — including the National Public Data breach, which made headlines last year for reportedly leaking a massive amount of sensitive information on the dark web, including full names, social security numbers, contact information and mailing addresses. Having that information out there could lead to more fraudulent filings, he explains, or “confidence scams" — where cyber criminals share one piece of information they have, like an address, to get people to trust them and share more.

How can I protect my information and money?

File as soon as you can.

Nobody is eager to sit down and do their taxes, but getting it out of the way early — and before any scammers potentially try to file something in your name — makes a huge difference, Chronister explains. He adds that taxpayers can play it safe by sticking to what they know.

“If you’ve always been using TurboTax, use TurboTax. If you always use an accountant, use your accountant," Chronister said. He notes that you should also keep your information safe by password-protecting any past filings downloaded to your device and using a VPN when on public Wi-Fi.

The IRS also suggests setting up an identity protection PIN, a six-digit number that can help protect you from someone else filing in your name. You can also freeze your credit — which experts recommend as an added line of defense against future identity theft and fraud, even if you haven't been scammed. Freezing your credit prevents any new credit accounts from being created in your name. And you can always temporarily “unfreeze” if a check is needed to rent an apartment or apply for a loan. Credit freezes can be set up through three nationwide credit bureaus: Equifax, Experian and TransUnion.

And, again, remember that the IRS won't randomly contact you by email, text or phone. When in doubt, go to the official IRS website and reach out directly.

Avoiding scams can also come down to pausing before you click or act on anything. “Take a breath, count to 10 and then go, ‘OK ... is this too good to be true?'" Chronister sad. "'Is my gut telling me something is off?'”

Chronister adds that social engineering is about emotion, not intelligence — and anyone can fall for it.

“It’s human to fall for these (scams)," he said. "They’ve been here since the beginning of mankind ... So you have to stay vigilant, but don’t panic. Just keep your gut check going.”