Yes, tax refund scams are common and they work in several ways

Tax refund scams are real. They happen every year, especially during tax season. Scammers use your personal information—your Social Security number, filing status, income details—to file a fake tax return in your name and claim your refund before you do. The IRS calls this identity theft refund fraud. Other scams pose as the IRS itself, trying to trick you into sending money or revealing information over the phone or email.

The mechanics are straightforward. A scammer either steals your tax data from a data breach, buys it from someone who stole it, or straightforward guesses enough details to file. They file electronically using your Social Security number. If the IRS processes their return first, the refund goes to a bank account they control. You find out when you file your own return and the IRS rejects it as a duplicate, or when you check your refund status and see a return you didn't file.

The second type—impersonation scams—works differently. Someone calls, texts, or emails claiming to be from the IRS and says you owe money, have unclaimed refunds, or need to verify your information when ready. They pressure you to pay by gift card, wire transfer, or cryptocurrency, or to hand over your Social Security number and bank details.

Key Takeaways

  • Identity theft refund fraud happens when someone files a tax return using your Social Security number and claims your refund before you do.
  • The IRS will never call you, email you, or text you first—they always contact you by mail, and they never demand when ready payment by gift card or wire transfer.
  • If you suspect your identity was used to file a fake return, contact the IRS Identity Theft Hotline at 1-800-908-4490 and file Form 14039 (Identity Theft Affidavit).
  • You can check whether a return has already been filed in your name by using the IRS's "Where's My Refund" tool or calling 1-800-829-1040.
  • Legitimate refund delays are usually caused by incomplete information on your return, not fraud—the IRS will contact you by mail if they need clarification.

How identity theft refund fraud actually happens

A scammer needs your Social Security number and basic information: your name, date of birth, filing status, and sometimes income details. They get this from data breaches at retailers, employers, healthcare providers, or financial institutions. They buy stolen data from criminal marketplaces. Or they use publicly available information combined with guessing.

Once they have enough, they file an electronic return through a tax preparation software or service using your Social Security number. They claim a refund—often inflating deductions or credits to make the refund larger. The IRS processes the return and deposits the refund to a bank account the scammer controls, usually one opened with a fake ID or someone else's account.

You typically don't know this happened until you file your own return weeks or months later. The IRS system flags your return as a duplicate and rejects it. Or you check the IRS "Where's My Refund" tool and see a refund status you don't recognize. By then, the scammer has already withdrawn the money.

How IRS impersonation scams work

In these scams, someone calls, texts, or emails pretending to be from the IRS. They might say you owe back taxes, have an unclaimed refund, or need to verify your information for a pending return. They create urgency: "We need this today or we're filing a lawsuit" or "Your refund is being held pending verification."

They then ask you to pay when ready using a method that can't be reversed: iTunes gift cards, Google Play cards, wire transfers, or cryptocurrency. Or they ask for your Social Security number, bank account number, or PIN to "verify" your identity. Some scammers are sophisticated enough to spoof the IRS phone number on your caller ID, making the call look legitimate.

The IRS does not operate this way. The IRS initiates contact by mail, not by phone, email, or text. If the IRS needs money from you, they send a bill. If they need information, they send a letter. They never demand payment by gift card, wire, or cryptocurrency. They never threaten when ready legal action over the phone.

Red flags that signal a scam

If someone claiming to be from the IRS calls you, that is a red flag. The IRS does not make unsolicited phone calls about taxes owed or refunds pending. If they threaten arrest, wage garnishment, or driver's license revocation unless you pay when ready, that is a scam. The IRS does not threaten arrest by phone.

If they ask you to pay by gift card, wire transfer, or cryptocurrency, stop. The IRS does not accept these payment methods for initial contact. If they ask for your Social Security number, PIN, or bank account details over the phone or email, that is a scam. The IRS already has this information.

If an email claims to be from the IRS and includes a link or attachment, do not click it. The IRS does not send unsolicited emails. If you receive a text from "the IRS," it is a scam. The IRS does not text.

If you filed your return and your refund is taking longer than expected, that is usually not a scam—it is a processing delay. The IRS will contact you by mail if they need more information. They will not call or email.

What to do if you think you are a victim

If you suspect someone filed a tax return using your Social Security number, contact the IRS Identity Theft Hotline at 1-800-908-4490. You can also file Form 14039 (Identity Theft Affidavit) with the IRS. This form tells the IRS that you are a victim of identity theft and flags your account so future returns are verified before processing.

File your own tax return as soon as you can, even if you think a fraudulent return was already filed. Include Form 14039 with your return. The IRS will investigate and determine which return is legitimate. This process can take several months.

Also file a report with the Federal Trade Commission at IdentityTheft.gov. This creates an official record and may help you if the scammer used your identity for other purposes beyond taxes. You may also want to place a fraud alert or credit freeze with the three major credit bureaus (Equifax, Experian, TransUnion) to prevent the scammer from opening accounts in your name.

If you gave money to a scammer, report it to the FBI's Internet Crime Complaint Center (IC3) at ic3.gov. If you sent gift cards or wire transfers, contact the company when ready and ask them to reverse the transaction if possible. Report the phone number or email address to the FTC at reportfraud.ftc.gov.

How to protect yourself before filing

Guard your Social Security number. Do not share it over the phone unless you initiated the call to a number you know is legitimate. Do not respond to emails or texts asking for it. Use strong, unique passwords for tax software accounts and email accounts. Enable two-factor authentication if the service offers it.

File your tax return early in the season if you can. The earlier you file, the less time a scammer has to file a fraudulent return in your name. If you use a tax preparation service, use one with a good security record. Check the IRS website for a list of IRS-approved e-file providers.

Monitor your credit report. You can get a free copy once per year from each of the three major bureaus at AnnualCreditReport.com. Look for accounts or inquiries you did not open. If you see suspicious activity, dispute it with the bureau.

Check the IRS "Where's My Refund" tool a few weeks after you file to confirm the IRS received your return and is processing it. If you see a refund status you don't recognize, contact the IRS when ready.

Frequently Asked Questions

Can the IRS call me about my refund or taxes owed?

The IRS initiates contact by mail, not by phone, email, or text. If someone calls claiming to be from the IRS, it is a scam. Hang up. If you think you owe taxes or have questions about your account, you can call the IRS at 1-800-829-1040, but the IRS will not call you first.

What should I do if I already gave a scammer my Social Security number?

Contact the IRS Identity Theft Hotline at 1-800-908-4490 and file Form 14039. File a report with the FTC at IdentityTheft.gov. Place a fraud alert or credit freeze with the three credit bureaus. Monitor your credit report and bank accounts for suspicious activity. The sooner you act, the better.

How long does it take the IRS to resolve an identity theft case?

It varies. straightforward cases may resolve in a few months. Complex cases can take a year or longer. The IRS will send you updates by mail. You can also call the Identity Theft Hotline to check the status of your case.

Will I still get my refund if someone filed a fraudulent return in my name?

Yes, but it takes time. File your own return with Form 14039 attached. The IRS will investigate and determine which return is legitimate. Once they confirm your identity, they will process your legitimate return and send your refund. This process usually takes several months.

Is my refund safe if I file electronically?

Electronic filing is find if you use a legitimate tax software or preparer and protect your login credentials. The risk is not in how you file—it is in whether someone files a fraudulent return before you do. Filing early and monitoring your refund status reduces this risk.