Tax scams remain an ongoing threat, costing taxpayers billions of dollars each year. Scammers are especially active during tax filing season, when sensitive financial and personal information is being shared more frequently. While some criminals target personal data to steal identities, others are focused on intercepting refunds and tax credits.
With the opening of the 2026 tax season, filing promptly and remaining vigilant can go a long way in helping mitigate these risks. Below are several common tax‑related scams to be aware of, along with steps you can take to help protect yourself.
Scam #1: Income tax identity theft
While not a new scam, income tax identity theft continues to be one of the most prevalent tax‑related threats.1 This occurs when criminals steal someone’s Social Security number and file a fraudulent tax return in their name to claim refunds or credits. False income, deductions, or credits are often reported to inflate the refund amount.
Victims may not discover the issue until their legitimate return is rejected, and resolving the situation can delay refunds for months. Safeguarding your Social Security number and other sensitive information is critical. The following steps can help reduce your risk:
- File early: Submitting your return as soon as possible helps prevent criminals from filing a false return in your name.
- Obtain an Identity Protection (IP) PIN: An IP PIN is a six‑digit number issued by the IRS that helps prevent someone else from filing a tax return using your SSN or ITIN. A new IP PIN is generated each year and is known only to you and the IRS.
- Monitor your accounts: Regularly review financial accounts, credit reports, and tax documents for unusual or unauthorized activity.
Scam #2: Fake charity scams
Because charitable contributions may be tax‑deductible, fake charity scams remain a persistent issue. According to the IRS, these scams often increase during times of crisis or natural disasters and frequently target higher‑income taxpayers.2
Before donating, always verify that the organization is legitimate. The IRS offers a Tax‑Exempt Organization Search tool to help taxpayers confirm whether a charity is qualified to receive tax‑deductible contributions.
Scam #3: AI‑generated tax scams
Artificial intelligence has become an increasingly powerful tool for scammers. In 2026, fraudsters are using AI to craft highly convincing phishing emails, text messages, and even voicemail messages that appear to come directly from the IRS or tax professionals.3 These messages may contain accurate personal details pulled from data breaches, making them difficult to spot.
Be especially cautious of:
- Phishing emails or text messages: Watch for urgent tone, suspicious links, or requests for personal information.
- Fake IRS notices: The IRS does not initiate contact through email, text, or social media.
- Spoofed phone calls: Caller ID may falsely display “IRS” or “Federal Government.” If you receive an unexpected call, hang up and contact the IRS directly using official contact information.
Scam #4: Fraudulent or “ghost” tax return preparers
The IRS continues to warn taxpayers to take care when selecting a tax return preparer. While most preparers are reputable professionals, some engage in fraud or disappear entirely after filing a return. This scenario leaves the taxpayer responsible for any errors.
A major red flag is a preparer who refuses to sign your return. Paid preparers are legally required to sign the return and include their valid Preparer Tax Identification Number (PTIN). Preparers who fail to do so may be attempting to avoid accountability.
Other warning signs include:
- Requesting payment in cash without providing a receipt
- Fabricating income or credits to increase a refund
- Inventing deductions that do not apply
- Directing refunds to their own bank accounts
Remember, the taxpayer is ultimately responsible for the accuracy of the return. Always:
- Review your return carefully
- Ask questions if something is unclear
- Verify routing and account numbers before filing
Scam #5: IRS phone scams
IRS phone scams continue to be widespread in 2026.4 In these schemes, scammers call claiming you owe back taxes and demand immediate payment, often threatening arrest or legal action. Some callers may even have partial personal information, such as the last four digits of your Social Security number, to sound legitimate.
Know this: The IRS will not call you to demand immediate payment. It will never require payment via wire transfer, prepaid debit cards, gift cards, or cryptocurrency. Legitimate IRS correspondence is sent through regular or certified U.S. mail.
If you receive a suspicious call or message, hang up, block the number, and report it by forwarding details to phishing@irs.gov.
Scam #6: Tax settlement and Offer in Compromise scams
The IRS’s Offer in Compromise (OIC) program is a legitimate option for some taxpayers who cannot pay their full tax liability. However, “OIC mills” continue to aggressively market debt‑settlement services, often charging steep fees while falsely promising dramatic reductions in tax debt.
In many cases, taxpayers do not qualify for the program and could have determined eligibility at no cost. To protect yourself, use the IRS’s Offer in Compromise Pre‑Qualifier tool before working with any third‑party firm.
Scam #7: Misleading tax advice on social media
A growing risk heading into the 2026 filing season involves tax misinformation spread through social media platforms. Some influencers and promoters encourage taxpayers to claim credits they do not qualify for, fabricate deductions, or misuse tax forms, often promising “secret” refunds or loopholes.
Following bad advice can result in audits, penalties, and repayment of refunds. Always verify tax strategies through official IRS guidance or a trusted tax professional before acting on what you see online.
If you are a Mercer Advisors client and would like more information on our tax planning and preparation services, please contact your advisor. If you’re not a client, but would like more information on Mercer Advisors and what makes us unique, let’s talk.
1 IRS, Taxpayer Guide to Identity Theft
2 IRS, Charity and Donation Scams
3 IRS, Dirty Dozen Tax Scams
4 IRS, IRS Phone Scams
All expressions of opinion reflect the judgment of the author as of the date of publication and are subject to change. Some of the research and ratings shown in this presentation come from third parties that are not affiliated with Mercer Advisors. The information is believed to be accurate but is not guaranteed or warranted by Mercer Advisors. Content, research, tools and stock or option symbols are for educational and illustrative purposes only and do not imply a recommendation or solicitation to buy or sell a particular security or to engage in any particular investment strategy. Links are being provided as a convenience and for informational purposes only; they do not constitute an endorsement or an approval by Mercer Advisors of any of the products, services or opinions of the corporations or organizations or individuals represented in the links. Mercer Advisors bears no responsibility for the accuracy, legality or content of the external sites or for that of subsequent links. Contact the external site for answers to questions regarding its content.
