The Better Business Bureau (BBB) is alerting the public to a rise in tax scams and fraud, particularly with new tax deduction rules. Taxpayers lost billions in 2023, and scammers are expected to be more aggressive. Common scams include tax identity theft, email phishing, IRS impersonation, and shady tax preparers. The BBB provides tips to help people avoid these scams.
Tax season is almost upon us and the Better Business Bureau is warning the public about fraudsters and scammers that like to take advantage of people during this hectic and stressful time.With all the new tax deductions rules enacted by President Donald Trump, scammers are expected to be extra active this year.
"We expect tax scammers to be especially aggressive this year," says Steve J. Bernas, BBB president and CEO. "They will come out of the woodwork to cash in on you."In 2023, taxpayers lost $5.5 billion due to tax scams and fraud, according to the Internal Revenue Service . Here are the scams to look out for: Tax identity theft: Scammers who are able to steal your personal information, such as a social security number, can then file a tax return and collect the refund.This can happen through phony tax preparation services, a data breach, or phishing scams, the BBB said.Email phishing scams: Emails that appear to be from official agencies, such as the IRS, can include links that direct you to an illegitimate website.Sometimes people can be directed to update an IRS e-file or report problems with their taxes. The websites can sometimes mention USA.gov or a variation of an IRS website. Scammers will try to get you to click on a link or call a fake phone number in order to steal your identity or money. IRS impersonation scams: Fake IRS agents can call taxpayers, saying they owe back taxes and ask for those payments via a wire transfer or setting up a prepaid debit card. This is a scam and the IRS would never ask for immediate payment like this. "Ghost" shady tax preparers: This type of scam can come in the form of a brick and mortar shop. The scammers will tell you they can file your taxes fast or promise larger refunds. It’s best to check out the business before you hire them to file for you to avoid losing money and paying high fees. For more information about how to avoid scams this tax season, click here. Tax season officially opens on Jan. 26 and Feb. 2 is when employers should send out W-2 forms to give filers enough time to complete their tax returns. Data collected in 2025 found that nearly one in four people have fallen victim to tax scams. Young adults : This group is, surprisingly, the most likely to fall victim to scams. They are also most likely to have their information compromised via Instagram and WhatsApp.And when people do lose money, the amounts can be substantial:Different age groups are targeted with different scams. Here’s the breakdown.According to that same 2025 data, people have received suspicious messages claiming to be from the IRS or a state tax authority via:These messages often include demands for:It's important to note, again, that the IRS generally doesn't initiate contact via phone, text or social media to demand immediate payment.
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