Tax season is on top of us, and while many of you are ready to file your proceeds, it is important to be aware of the ever-evolving world of tax fraud.
This year, it’s more important than ever to be informed and unsupervised.
New research by McAfee, a Cybersecurity companysheds light on how common these scams are, what they are, revealing surprising trends and highlighting the importance of protecting yourself.
Scams written on tax forms (Kurt “Cyberguy” Knutsson)
How Americans submit and pay taxes in 2025
Before jumping into scams, let’s take a look at how people handle taxes these days. McAfee Research Here we show:
- Over half (53%) of Americans are e-filers and employ online routes via tax software or IRS free files
- Almost a third (31%) relies on professional tax returners
- The majority (60%) process payments and refunds electronically
- The majority (52%) still receive W-2 and 1099 in the old fashioned way:
- Others (31%) log in and search for Payroll Services Portal (ADP, Workday, Paychex, etc.)
Tax preparation tool illustration (Kurt “Cyberguy” Knutsson)
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The uneasy reality of tax fraud
In reality, tax fraud is more common than we like to admit. One in four (23%) (23%) said they know someone or that the victim of such a scam has personally collapsed. Let’s break down who is being influenced and how it is affecting them.
- Young Adult (18-24): The group is surprisingly likely to be the victim of fraud. It is also most likely to compromise your information via Instagram and WhatsApp.
- Elderly (65-74): At the other end of the spectrum, older people are least likely to have encountered tax fraud.
- Gender difference: Young men are much more likely to lose money to fraud than young women.
And when people lose money, the amount can be substantial:
- 81% exceeded $500
- 51% lost more than $1,000
- The plain 5% lost over $10,000
A scam written on a tablet surrounded by cash (Kurt “Cyberguy” Knutsson)
Hidden Costs of Free Apps: Your Personal Information
Requests and Threats: What a Scammer Wants
Scammers use a variety of tactics to trick people into giving up money and personal information. The investigation shows that many people receive suspicious messages from:
- Telephone (30%)
- Text message (27%)
- Facebook/Facebook Messenger (5%)
- whatsapp (3%)
- Instagram/Instagram direct message (2%)
These messages often include the following requests:
- Social Security Number or Tax Identification Number (40%)
- Immediate tax payment (27%)
- Bank account number (18%)
- Credit/Debit Card Information (17%)
It is important to note that the IRS usually initiate contact via phone, text, or social media to request immediate payment.
Woman preparing tax (Kurt “Cyberguy” Knutsson)
Taxation Truth: State-by-state analysis of tax time tactics
Who is targeting which scams?
Different age groups are targeted by different scams. This is a malfunction.
- Elderly (65-74): The group has been highly targeted by payment fraud, including tax requests and fake tax refund schemes.
- Middle Aged (35-54): This group is covered by a combination of identity theft and payment fraud, such as requesting social security numbers or requesting back tax payments.
- Young Adults (18-24): Scammers often seek personal information from this group, such as their date of birth and bank account number.
Woman working on taxes (Kurt “Cyberguy” Knutsson)
Costs Falling for Scams
Many people have used the link to receive emails or texts about “tax refunds” or “tax refund e-statement.” The majority (39%) of those who clicked on these links clicked. I’m definitely surprised how many people will fall in the end because of these scams.
What is Artificial Intelligence (AI)?
Almost 40% of people who receive or call scam messages actually send scammer money. Young adults are particularly vulnerable. More than half of the ages 18 to 24 know who paid. Click on the fascinating links about tax refunds and e-statements and you’re playing a high-risk game. Almost 40% of 40% clicked on the email or text message.
Woman working on taxes (Kurt “Cyberguy” Knutsson)
The role of AI in the future of tax fraud
Looking ahead, AI is making fraud even more scary. A whopping 87% of people worry about the role of AI in creating realistic tax fraud, but only 40% are sure they can find the IRS’ Deepfaki. As a result, many people (41%) are second guessing actual tax communications. In fact, over half say the tax fraud messages they received this year are either more refined or realistic than last year. It’s no wonder that most people are worried about tax fraud this season.
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“Tax fraudsters are becoming smarter and are more persuasive than ever when many people use AI to feel the most pressure to submit quickly,” says Abhishek Karnik, head of threat research at McAfee. “Not all scams use AI, but as access to AI tools increases, we predict an increase in tax fraud tactics focused on more sophisticated social engineering. This can be easier with AI-generated audio, phones using fake tax preparation websites, even smarter filers.”
How to protect yourself from tax fraud
Ok, so the scam scene looks quite harsh. What can you do to keep you safe? Here are some practical steps to protect yourself.
1. Be skeptical of unsolicited contacts. Remember that the IRS will not contact you via phone, email, text, or social media to request immediate payment or request personal information.
2. Do not click on suspicious links. Use powerful antivirus software: Do not click on email or text links from unknown senders. The best way to protect yourself from malicious links to install malware is to install antivirus software on all devices, as it may access your personal information. This protection can also warn you that it will phish email and ransomware scams and keep your personal information and digital assets safe. Get the best 2025 Antivirus Protection Winners picks for Windows, Mac, Android and iOS devices.
3. Guard your personal information: Carefully protect your Social Security Number, bank account details and other sensitive data.
4. Create a powerful and unique password. Use strong passwords on your financial and tax websites. Make sure each password is unique, especially for financial accounts. Get my details Find the best expert reviewed password managers of 2025 here.
5. Enable 2-factor authentication. This adds an additional layer of security to your account that prevents hackers from entering your account.
6. Investing in Personal Data Deletion Services: These services monitor your personal information and alert you of potential scams. Although there is no service that promises to delete all data from the internet, deleting a deletion service is great if you want to constantly monitor and automate the process of continuously deleting information from hundreds of sites over a long period of time. Check out our top picks for data deletion services.
7. Do not answer text/calls from unknown sources: Whatever you do, don’t reply to text/calls from unknown sources.
8. Trust your gut: If something is turned off, it probably is. Please contact your IRS or state tax authorities directly to review your information individually.
Important takeouts for your cart
Tax season doesn’t have to be a worry-filled, stressful time. By keeping your information in place, being vigilant and taking simple steps to protect yourself, you can confidently navigate the tax environment and avoid the victims of these frauds. Be skeptical, be careful and always remember that it’s always better to be safe than always when it comes to taxes.
Have you or someone you know ever been targeted for tax fraud? Write us and let us know cyberguy.com/contact.
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