Tax scam alert: How to protect yourself and your tax refund

This year, it's more important than ever to stay informed and on your guard. 

And when people do lose money, the amounts can be substantial:

Scammers use a variety of tactics to trick people into giving up their money or personal information. The research shows that many 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 that the IRS generally doesn't initiate contact via phone, text or social media to demand immediate payment.

Different age groups are targeted with different scams. Here's the breakdown.

Many people have received emails or texts about their "tax refund" or "tax refund e-statement" with a link. A large portion of people (39%) clicked on these links. It's definitely alarming how many people end up falling for these scams. 

Almost 40% of people who get a scam message or call actually send the scammer money. Younger adults are particularly vulnerable; more than half of 18- to 24-year-olds know someone who's paid up. When people click those tempting links about tax refunds or e-statements, they're playing a risky game: Almost 40% of people clicked on that email or text message, and that's where scammers can really get you.

Looking ahead, AI is making scams even scarier. A whopping 87% of people are worried about AI's role in creating realistic tax scams, but only 40% feel confident they could spot a deepfake from the IRS. As a result, many people (41%) are second-guessing real tax communications. In fact, more than half of people say the tax scam messages they've received this year are more sophisticated or realistic than last year. It's no wonder that most people are concerned about tax fraud this season. 

"Tax scammers are getting smarter, and many are using AI to make their tricks more convincing than ever, just when people are feeling the most pressure to file quickly," said Abhishek Karnik, head of threat research at McAfee. "While not every scam uses AI, we predict a rise in more sophisticated, social engineering-focused tax fraud tactics as access to AI tools increases, including fraudulent emails, phone calls that use AI-generated audio and fake tax prep websites, making it easy for even the savviest filers to slip up."

OK, so the scam landscape looks pretty grim. What can you do to stay safe? Here are some practical steps to protect yourself.

1. Be skeptical of unsolicited contact: Remember that the IRS will never contact you via phone, email, text or social media to demand immediate payment or request personal information.

3. Guard your personal information: Protect your Social Security number, bank account details and other sensitive data carefully.

5. Enable two-factor authentication: This adds an extra layer of security to your accounts that will prevent a hacker from getting into your accounts.

7. Don't respond to texts/calls from unknown sources: Whatever you do, don't respond to texts/calls from unknown sources whatsoever.

8. Trust your gut: If something feels off, it probably is. Verify information independently by contacting the IRS or your state tax authority directly.

Tax season doesn't have to be a stressful time filled with worry. By staying informed, being on your guard and taking simple steps to protect yourself, you can confidently navigate the tax landscape and avoid falling victim to these scams. Be skeptical, be careful and always remember that when it comes to your taxes, it's always better to be safe than sorry.

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