Tax season brings a wave of legitimate offers to get your money sooner, and an equally predictable wave of scams designed to take it. Fraudsters know that people waiting on a refund may be short of cash and eager for a quick answer. Knowing the common warning signs is the best protection.
Fake refund advance offers
Legitimate refund advances are offered through tax preparers and their partner banks, usually at the time your return is filed. Be wary of any offer that:
- Arrives by unsolicited text, social media message or email promising "instant refund cash."
- Asks you to pay an upfront fee, buy a gift card or send money by wire or payment app before you receive anything.
- Guarantees approval or a specific amount without looking at your return.
- Asks for your online banking password, IRS account login or a full copy of your identity documents through a chat or link.
A real lender may check your identity and your return, but it will not ask you to pay first to "release" an advance.
Ghost preparers
A "ghost preparer" prepares returns for a fee but does not sign them. Federal rules require anyone paid to prepare a return to sign it and include a Preparer Tax Identification Number (PTIN). Red flags include:
- Refusing to sign the return or to give you a copy.
- Basing the fee on a percentage of your refund.
- Promising a larger refund than other preparers by inventing income, credits or dependants.
- Asking you to sign a blank or incomplete return.
- Directing your refund into the preparer's own account instead of yours.
You are legally responsible for what is on your return even if someone else prepared it. If false information is added, any repayment, penalties and interest fall on you.
Refund identity theft
In refund identity theft, a criminal files a return using your Social Security number to claim a refund before you do. You may only find out when your own e-filed return is rejected as a duplicate, or when the IRS sends a letter asking you to verify your identity.
Protect yourself with an IP PIN
The IRS Identity Protection PIN (IP PIN) is a six-digit number known only to you and the IRS. Once you have one, a return filed with your Social Security number must include the correct IP PIN or it will be rejected. Taxpayers who can verify their identity can request an IP PIN through their IRS online account, and a new PIN is issued each year.
Other everyday precautions
- File as early as you reasonably can, so a fraudster is less likely to file first.
- Use strong, unique passwords and multi-factor authentication on tax software and email accounts.
- Shred old documents that show your Social Security number, and store W-2s and 1099s securely.
- Use secure, known websites; type IRS.gov into your browser rather than clicking links in messages.
IRS impersonation
The IRS generally makes first contact by mail. It does not start contact by email, text or social media to ask for personal or financial information, and it does not demand immediate payment by gift card, prepaid card or wire transfer. Callers threatening arrest or deportation over an unpaid tax bill are almost certainly scammers.
What to do if something goes wrong
- Your e-filed return is rejected as a duplicate: follow IRS instructions for identity theft, which usually means filing a paper return with Form 14039, Identity Theft Affidavit.
- You receive an IRS letter about a return you did not file: respond using the contact details in the letter, which you can confirm on IRS.gov.
- You suspect a preparer of fraud or misconduct: report it to the IRS on Form 14157.
- You received a phishing email or text claiming to be the IRS: forward it to phishing@irs.gov without clicking links.
- Your identity was stolen more widely: use IdentityTheft.gov from the Federal Trade Commission to create a recovery plan.
This article is general information, not legal or tax advice. TaxRefund4Cash is not a lender or tax preparer and is not affiliated with the IRS. Check current guidance on IRS.gov and FTC.gov.