Tax season can be stressful enough without scammers trying to take advantage of it. Unfortunately, one of the most common fraud schemes this time of year is a tax scam phone call designed to frighten people into sending money quickly.
Here’s how the scam works—and how you can protect yourself.
How the “Tax Trap” Scam Works
In this scam, you receive an unexpected phone call from someone claiming to be an agent from the Internal Revenue Service (IRS). The caller may sound very convincing and might even provide what they claim is a government badge number to make the call seem legitimate.
The caller will tell you that you owe money to the IRS and that the situation is urgent. They may threaten you with fines, legal trouble, or even arrest if you don’t immediately pay what you supposedly owe.
The pressure is intense and designed to make you act quickly.
But here’s the truth: the caller isn’t from the IRS at all. It’s a cybercriminal trying to scare you into sending money.
They will usually demand payment through wire transfer, prepaid debit cards, or gift cards—methods that are difficult to trace and nearly impossible to recover once the money is sent. If you send the payment, it goes directly to the scammer.
How to Protect Yourself from Tax Scams
The good news is that these scams have clear warning signs. Keeping the following tips in mind can help you avoid becoming a victim.
The IRS doesn’t threaten you over the phone
The IRS does not call people to demand immediate payment or threaten arrest. If there is a legitimate issue with your taxes, the IRS typically contacts you by mail first.
The IRS won’t demand unusual payment methods
If you truly owe money to the IRS, they will never require payment through prepaid debit cards, wire transfers, or gift cards. Scammers prefer these methods because they are difficult to trace.
Don’t let fear rush your decision
Scammers rely on fear and urgency to get you to act without thinking. If someone pressures you to send money immediately, take a step back. Pause, verify the information, and contact a trusted source before taking action.
When in Doubt, Slow Down
The most important thing to remember is this: fraudsters want you to panic. When someone tries to scare you into making a quick payment, it’s often a sign that something isn’t right.
Take a moment to stop and think. If you receive a suspicious call about taxes or any financial matter, hang up and verify the information through official channels.
And if you’re ever unsure, we're always here to help answer questions and help you protect your finances.