AI-Driven Tax Scams Are Rising — 6 Ways To Avoid Them, According To Experts
Written by
Vance Cariaga
Edited by
Angela Corry
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Tax scams are already widespread enough without fraudsters using advanced technologies to swindle people out of even more money. As recently as 2023, about $5.5 billion was lost to tax-fraud schemes, according to IRS data cited by J.P. Morgan. That figure could balloon much higher amid a surge in AI-driven tax scams.
In fact, a new report from identity theft protection company LifeLock noted that in 2024, the IRS Criminal Investigation unit uncovered more than $9.1 billion in tax fraud and other financial crimes.
LifeLock warned that taxpayers face “unprecedented challenges” in safeguarding their personal and financial information due to the rise in AI-driven scams. This often comes in the form of scammers using AI-generated voices to impersonate IRS agents or tax professionals.
“We’re in a new era of tax scams, where AI gives fraudsters an unprecedented advantage,” Ian Bednowitz, General Manager of LifeLock, said in a Feb. 25 press release. “The challenge isn’t just that these scams exist — it’s that they’re becoming nearly indistinguishable from legitimate communications. Taxpayers can no longer rely on gut instinct alone to spot a scam.”
Tax scams are nothing new. For many years, the IRS has warned taxpayers against giving information to scammers making urgent requests to pay money immediately or asking you to click on links or attachments you don’t recognize.
But with scammers using AI to create ever more sophisticated crimes, you need to be even more vigilant to battle tax fraud. Here are six ways to avoid AI-driven tax fraud, per LifeLock.
- Use Reputable Tax Prep Services. LifeLock recommends ensuring that your tax preparer has a valid Preparer Tax Identification Number and is authorized to file returns.
- Verify IRS Communications. The IRS will “never” reach out via email, text or social media to request personal or financial information, according to LifeLock – but scammers will. If you get a message from someone claiming to represent the IRS, ignore the message and call the agency yourself. Another good idea is to establish a “safe word” to use with your tax preparer so you know it’s them when they reach out.
- Safeguard Your Personal Information. Don’t ever share sensitive data over the phone or online unless you are 100% certain of the recipient’s identity.
- Check Your Financial Accounts. You should regularly monitor your bank and credit accounts to see if anything looks suspicious. If so, contact customer service immediately.
- Report Suspicious Activity. If you suspect a tax scam, report it immediately to the IRS and Federal Trade Commission.
- Use Anti-Fraud Tools and Services. Numerous private sector services are available to help you reduce the risk of fraud, including those offered by LifeLock. These are especially important now, with government agencies such as the Consumer Financial Protection Bureau on the chopping block under the Trump administration’s plan to slash government spending, according to NPR.
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