tax return scams

Tax Return Scams: 4 Ways Hackers Can Take Your Tax Refund

Hackers can target your tax returns year-round: While most of us grit our teeth and file our taxes before the April deadline, those who filed for an extension have until mid-October to file their taxes.

To hackers, this means that “hunting season” is year-round when it comes to tax scams and attacks. So, I guess you could add “cyber crime” to the list of things we can’t avoid in this world along with “death and taxes.” Or can we? 

As computers and automation have become a greater part of people’s lives, scammers have attempted to cash in by preying on people who are stressed out and just want to avoid a problem with the IRS.

That desire combined with a lack of knowledge can make an honest taxpayer into an easy mark for a scammer. Luckily, a little knowledge can go a long way. Here are a few tricks scammers will try and tips on how you can avoid being a victim.


tax scam ransomware

If you thought that preparing your taxes was the most unpleasant chore you’ll do for yourself or your small business, it’s not. Paying a ransom to a hacker to unlock your tax documents is much worse! 

The recent WannaCry ransomeware attack got a lot of attention, but did you know there are specific viruses that target your tax files year-round?

It’s true. Windows users have reported having their tax return files (created by tax-filing programs like TurboTax) locked by hackers who then immediately demand a $500 ransom (often in bitcoin) to unlock them. Yikes!

Here’s a few things you can do to fight ransomware:

  • Be sure to have “automatic updates” enabled for your Windows or Mac operating system to have the latest security patches installed.
  • Consider having a top-name antivirus software installed on your computer
  • Have your files backed up remotely on the cloud. It’s inexpensive if you use a top name like Carbonite or Mozy

While the most wide-spread ransomeware makes the news, it seems there’s always something newer and nastier lurking out there on the web!

Fake Tax Returns

This one is the hardest one to stop because there’s no way to predict when it’s going to happen. You sit down to do your taxes, complete them all, look everything over and hit send… and your return is rejected because there’s already a tax return filed under your name.

Sound impossible? It’s not. Hackers will sometimes fill out a tax return using stolen information to try to claim the refund that the victim rightfully earned. The victim has no way to know when it happened or who did it, all they have is a tax return filed that they didn’t do and a refund that they can never collect.

If you do your taxes at the last minute or have filed an extension, you might be more susceptible to this tax scam. Other than protecting your personal information, the only way to fight this scam is to do your returns as soon as possible.

Remember, the IRS only accepts one return per Social Security number, so the earlier you do it, the lesser the chances are of someone swooping in on your return.

You don’t have to pull a Ned Flanders and do your taxes on January 1, but you should do them as soon as you have all of your information.

IRS Phishing

If you’ve looked through your e-mail at any point, you’ve probably received a few phishing e-mails in your inbox. These aren’t limited to companies and trying to get into your accounts.

Hackers now send phishing e-mails from a website that looks similar to the IRS’ official website, getting victims to give them some personal information and easy access to their cash.

These need to be treated like other phishing e-mails: don’t click the link in the e-mail. Instead, call the IRS directly and ask about the e-mail.

Don’t trust the e-mail; go directly to and check out the information you have against the information they provide. When you don’t click their links, these “phishing” hackers cannot hurt you.

There are now even scammers on dating sites like that will try to gain your trust and then phish for your personal information.

Doing your taxes is one of the most stressful chores of the year, and that’s why we hate it so much. There’s no reason you should increase your waiting time and your stress level by having to worry about hackers stealing your information and using it against you.

If you take the time to prepare yourself to defend against hacking, it won’t be long before you’re faced with another key decision: What to use your tax refund money to fund!

The Phone Call (low-tech scam!)

phone tax scamOh, yes; scammers go “low-tech” too! One day you’re sitting at your desk and receive a call from a number that you don’t recognize. You answer, and the voice on the other end tells you he’s from the IRS and you owe money for your taxes. Examples of this could be from an error in your tax form or money owed for a specific tax that you might have never heard of in your life.

Either way, the voice demands that you must pay them now in order to avoid further penalties and asks for you to pay your balance over the phone by giving your personal information to them. Of course, once they get it, they make a duplicate of your card, using your information to obtain whatever they want for themselves and depleting your bank account or your available credit.

The solution is simple: if someone says they’re from the IRS, either hang up or tell the caller that it isn’t a good time and you’ll call the IRS back later that day. A genuine IRS agent will have no problem with that request and will do nothing more than ask if you need the number and wish you a pleasant day. A scam artist will try to get you to stay on the phone and talk to them rather than calling the real IRS, because if they get information out of you, they have all they need to make money and hurt you.

The most important thing is to never say anything that could be private information over the phone unless you are 100 percent certain you’re talking to a genuine agent at the IRS. Instead, call the real IRS at (800) 829-1040 to check if the call was real. You’ll either catch a real issue and get it fixed by someone reputable, or you’ll expose a fraud.

About kevin

Hi, I'm Kevin McCormick. I graduated from Rutgers U., and now live in Philadelphia with my wife, three kids, and a dog. I enjoy blogging in my free time, especially about finance and the history of taxation. Thanks for stopping by Mighty Taxes!