Tax season is one of the most financially vulnerable times of year for American households — not just because of what you owe, but because of what fraudsters want to steal. Here's what you need to know to make sure you and your family are equipped with the facts and practical steps to stay protected.
By the Numbers: The Scope of the Problem
Most people assume tax scams happen to someone else. The data says otherwise.
- 1 in 4: Americans report a tax scam tied to identity theft involving their Social Security number. (Source: Norton Research, 2025)
- $8,401: Average reported financial loss per tax scam victim, not including CPA or legal fees. (Source: Norton Research, 2025)
- 42%: of adults aged 18-24 report falling for at least one tax scam — the highest of any age group. (Source: McAfee, 2026)
- 2.1M+: Tax returns flagged by the IRS for suspected identity theft in the most recent filing year. (Source: IRS, 2025)
- $4.5 Billion: in federal crimes linked to tax fraud, as reported by IRS Criminal Investigation in its FY2025 Annual Report. (Source: IRS, 2025)
- 43: New fake tax websites created every single day during tax season — designed to steal your refund or personal information. (Source: McAfee, 2026)
One important note: contrary to what many people assume, seniors are not the most targeted demographic. Young adults face the highest exposure. That means it affects your adult children, grandchildren, and younger colleagues just as much, if not more, than older generations.
Tax Scams Targeting Americans Right Now
Awareness is the first line of defense. Here are the most active schemes this filing season:
- "Your Refund Is On Hold" / Wrong Account Scam: Fraudsters contact you claiming your refund was deposited to the wrong account and ask you to "verify" banking information. The IRS will never proactively contact you this way. Any unsolicited message about a refund issue is a red flag.
- IRS Impersonation Calls — Now AI-Enhanced: Phone scammers impersonating IRS agents are now using AI-generated voices to sound more convincing. They may claim you owe back taxes or face immediate legal action. The IRS does not make threatening calls demanding immediate payment.
- Smishing (Text Message Phishing): You receive a text claiming to be from the IRS, asking you to verify your identity or access a "recalculated refund." The link leads to a fraudulent site designed to harvest your personal and financial data.
- The Amended Return Scam: Someone contacts you — sometimes posing as a tax professional — claiming you made an error on your return and need to file an amendment. They then file a fraudulent amended return to redirect your refund.
- The "Early Access to Your Refund" Scam: A fraudulent offer claims to get your refund faster for a small fee or by providing your banking information. There is no legitimate service that provides IRS refunds earlier than standard processing.
How to Protect Yourself: 5 Action Steps
Knowledge alone isn't enough. Here is what you should do right now:
1. Don't Click — Go Direct to the IRS
Never click links in tax-related texts or emails, regardless of how official they appear. If you receive a message claiming to be from the IRS, go directly to IRS.gov by typing it into your browser, or call your tax preparer directly using a number you already have on file. As a rule of thumb: if they send you the link, don't take the bait.
2. Get an IRS Identity Protection PIN (IP PIN)
This is one of the most effective steps you can take. An IP PIN is a six-digit code issued by the IRS that locks your tax return so that no one else can use your Social Security number to file a return in your name. Think of it like two-factor authentication for your tax return. You can enroll at IRS.gov/IPPIN. Once enrolled, the PIN must be included on your return and without it, a fraudulent filer cannot submit a return in your name.
3. Treat Every Unexpected Tax Message as Suspicious
The IRS does not initiate contact via text message, email, or social media. Period. All official IRS correspondence begins with a letter sent through the U.S. Mail. If you receive anything digital that feels urgent or requests immediate action, treat it as fraudulent until verified. Urgency is a classic manipulation tactic in financial fraud.
4. Be Skeptical of Social Media "Tax Advice"
Viral posts claiming "secret tax refunds," special government credits, or loopholes you've never heard of are almost always false, or worse, designed to get you to file fraudulent returns. Fake "experts" on platforms like TikTok, Instagram, and YouTube may offer to help you file or fix your return, only to steal your refund or commit identity theft in your name. If your tax advice is coming from social media, it could cost you far more than it saves.
5. Create a Family Safe Word for AI Voice Scams
This one is newer and critically important. AI can now convincingly clone voices, including those of your children, spouse, or employer. Scammers use these cloned voices to call family members claiming to be in an emergency and needing money immediately. Because the voice sounds real, people comply.
The solution: establish a verbal safe word with your family — a word or short phrase that only real family members would know. If you ever receive a distressing call from a loved one, ask for the safe word. If they can't provide it, hang up and call back on a known number. If they can clone the voice, they cannot clone the safe word.
The Bottom Line
Protecting your financial wellbeing extends beyond your portfolio. Tax fraud and identity theft can have long-lasting consequences — disrupted filings, frozen refunds, damaged credit, and significant out-of-pocket legal costs. We encourage you to share this information with family members, particularly young adults who may not be aware of their elevated risk.
Ted & The Exit Wealth® Team
All opinions expressed in this newsletter is for general informational purposes and constitutes the judgment of the author(s) as the date of the newsletter. The opinions and views expressed by the author are personal and based on economic or market conditions at the time of publication. Actual economic or market events may turn out differently than anticipated. Nothing in this material is intended to serve as personalized investment, tax, or insurance advice. These opinions are subject to change without notice and are not intended to provided specific advice or recommendations for any individual.
The material has been gathered from sources believed to be reliable, however Exit Wealth® cannot guarantee the accuracy or completeness of such information, and certain information presented here any have been condensed or summarized from its original source. To determine which investments may be appropriate for you, consult your financial advisor prior to investing. As always, please remember investing involves risk and possible loss of principal capital and past performance does not guarantee future returns; please seek advice from a licensed professional.
