TIGTA Issues Alert on Rising Tax Season Scam via Text

Tax season is here, and while most Americans are busy filing returns, scammers are busy scheming. This year, fraudsters have cooked up a new tactic: fake IRS text messages that promise tax refunds but are designed to steal personal and financial information. The Treasury Inspector General for Tax Administration (TIGTA) has issued a warning for taxpayers and tax professionals. If you handle taxes for your clients, it’s time to pay attention.

How the Scam Works

It starts with a simple text message claiming that the IRS is sending you an Economic Impact Payment (also called the Recovery Rebate Credit). Don’t fall for it. The message may say something like: 'You are eligible to receive a $1,400 Economic Impact Payment. Please provide your accurate personal information. We will deposit the amount into your bank account or mail a paper check within 1 to 2 business days.

Sounds convincing, right? That’s the whole point. If you click on it, you’ll be taken to a fake IRS website that looks real but is designed to steal your personal and financial information. From there, scammers can access your Social Security number, tax records, and even bank details, putting you at risk of identity theft and financial fraud.

Who’s Behind This Trickery?

These scams aren’t the work of a single bad actor, they’re often run by organized cybercriminal networks that specialize in tax fraud and identity theft. Some key players include:

• Cybercriminal Groups: Many of these scams originate from well-coordinated groups based overseas. These gangs use sophisticated phishing kits to duplicate IRS websites and trick taxpayers into handing over their sensitive information.
• Fraudulent Tax Preparers: Some scammers pose as tax professionals to gain access to taxpayers' personal information.
• Fraud Rings in the U.S.: They operate domestically, purchasing stolen taxpayer data on the dark web and using it to send convincing text messages.
• Compromised Phone Numbers: Scammers often hijack real phone numbers to make their messages appear more legitimate. This technique, known as “spoofing,” makes it difficult to trace the fraudsters.
• Social Media Fraudsters: Criminals use hacked or fake accounts to spread misleading tax refund claims and lure victims into sharing their information.

Why It’s a Big Deal

For taxpayers, the consequences of falling for this scam can be devastating. A stolen Social Security number can be used to file fraudulent tax returns, open new credit accounts, or even claim your refund before you do. And for tax professionals, this scam poses a major risk to client data. One compromised tax preparer account could expose hundreds of taxpayers to fraud.

The IRS and TIGTA have been working to shut down these scams, but the bad actors keep evolving. In Fiscal Year 2024, IRS Criminal Investigation identified over $9.1 billion in fraud related to tax and financial crimes. The real number could be much higher.

Red Flags That Scream 'Scam Alert!

Whether you’re a taxpayer or a finance professional, staying alert is crucial. Here are some key red flags:

• The IRS does not send text messages asking for personal or financial information. If you receive one, it’s a scam—period.
• Scammers often use links that look similar to official government websites but may contain typos or unusual characters. A legitimate IRS website will always end in “.gov.” If it doesn’t, don’t click it.
• Scammers create panic to force immediate action. Messages may say things like “Act now to avoid penalties” or “Your tax return has been flagged.”
• If someone claiming to be from the IRS asks for payment via gift cards, wire transfers, or cryptocurrency, it’s a scam. The IRS will never ask for payment in these forms.
• Fraudulent tax preparers promise huge refunds, file fake returns, or steal clients’ identities. Always verify tax professionals by checking their Preparer Tax Identification Number (PTIN) and looking for legitimate credentials.

Steps to Take if You Receive a Scam Message

If you or a client receives a suspicious text, email, or call claiming to be from the IRS:

• Do Not Click on Any Links: This could install malware on your device.
• Report the Scam: Forward the message to the IRS at phishing@irs.gov and also report it to the TIGTA website.
• Block the Sender: This helps prevent further scam attempts.
• Check your IRS Account: If you’re concerned about your tax status, log in directly at irs.gov (never through a link in a text).

How To Protect Your Clients

Tax professionals have an added responsibility—not just to protect themselves, but also their clients. Fraudulent tax preparers continue to be a major threat, and finance professionals should:

• Educate Your Clients: Make them aware of these scams so they don’t fall victim.
• Enable Multi-factor Authentication (MFA): Adding an extra layer of security to your tax software can prevent unauthorized access.
• Verify IRS Communications: If you or a client receive an unexpected IRS notice, call the agency directly at 800-829-1040 to verify its legitimacy.
• Stay Updated: The IRS posts alerts about new scams on its website. Checking these regularly can help you stay ahead of fraudsters.
• Encourage Early Filing: Filing taxes early helps prevent scammers from fraudulently filing on behalf of a taxpayer before they do.

Don’t Let the Scammers Win

Taxpayers and professionals alike must stay one step ahead of scammers. Scammers will always find new ways to exploit tax season, but the best defense is awareness. Whether you’re a taxpayer or a tax professional, staying informed can keep your information (and your money) safe. If something looks off, trust your instincts—when in doubt, check directly with the IRS before taking any action. And remember: If the IRS needs to reach you, they’ll send a letter. Not a text. Subscribe to MYCPE ONE Insights for the latest in finance, accounting, and corporate news delivered straight to your inbox.