Guarding Yourself From Tax Scams – Things You Should Know!

reading time: 26 minute(s)

Tax season isn’t just busy—it can be risky at times.
As businesses and tax professionals rush to meet filing deadlines, scammers see an opportunity. Sensitive data, financial transactions, and compliance pressure create the perfect environment for fraud.

Tax scams today go far beyond fake phone calls. They appear at every stage of the filing journey—while collecting recipient information, during payment handling, through fake emails, and even via fraudulent filing software. For filers, especially those handling volume, one small misstep can lead to financial loss, compliance issues, or long hours spent fixing avoidable mistakes.

Understanding these scams—and using the right tools to protect against them—can make all the difference.

Why tax filers are prime targets for scammers

Tax filers handle some of the most valuable information scammers want:

• Business names and EINs
• Recipient details and TINs
• Payment records
• IRS communication and filing credentials

Tight deadlines and high filing volumes create pressure to move fast. During peak season, filers prioritize meeting deadlines over double-checking every request. 

That’s why tax scams don’t happen at just one point—they surface before, during, and after filing.

Common tax scams filers face—and where they happen

1. Recipient data collection scams

Collecting W-9 information is one of the earliest and most vulnerable stages of tax filing, making recipient data collection a common point of exposure.

Scammers may:

• Fake W-9 requests asking for TINs, names, and addresses
  
• Phishing emails claiming recipient information needs “urgent updates”
  
• Impersonation of contractors or vendors requesting changes

These requests often look legitimate and may closely resemble real communication you’ve received in the past.

2. Fake fortune companies and business impersonation

Scammers frequently pose as established companies or well-known vendors to gain credibility.

Common scams could be: 

• Emails claiming to represent Fortune companies
  
• Fake onboarding requests or payment updates
  
• Requests to file forms under modified business details

Because the brand name feels familiar, filers may respond without verifying the source.

3. Fake emails targeting tax filers

Phishing emails are one of the most common tax scams. These messages often:

• Claim to be from the IRS, state agencies, or filing softwares
  
• Include fake login links
  
• Contain malicious attachments

The goal is simple: steal credentials or sensitive data.

4. Fake CPAs and tax professionals

Not all scams come through emails. Some involve individuals posing as licensed tax professionals, offering filing services at unusually low costs.

Once they gain access to business data, they may disappear—or misuse the information.

5. Fake businesses and shell entities

Scammers may create fake businesses using stolen or fabricated EINs. These entities can appear legitimate during vendor onboarding and later surface as reporting issues.

This leads to confusion, rejected filings, and potential compliance problems.

6. Filing software–related scams

Not all scams come through emails or calls. Some appear as entire software.

• Websites mimicking legitimate tax filing software
  
• Promises of extremely low-cost or “instant” filing
  
• Softwares that collect data but never transmit forms

Once data is entered into fake software, it’s often impossible to retrieve or secure.

7. Identity verification and account takeover scams

Unauthorized login attempts and compromised credentials are becoming more common. Once access is gained, scammers can alter filings or extract sensitive data. Common scams could be:

• Fake identity verification alerts
  
• Emails claiming failed authentication
  
• Malicious links designed to capture login credentials

These scams often look like standard system notifications, making them harder to detect.

8. Fake IRS emails, texts, and phone calls

The IRS does not initiate contact through email, text, or social media—but scammers do.

These messages often:

• Demand immediate payment
  
• Threaten penalties or legal action
  
• Request payment via gift cards, wire transfers, or crypto

The goal is simple: create fear and urgency so filers act without verifying.

9. Payment-related tax scams

Payment scams are designed to create urgency.

Fake notices may claim:

• Fake invoices demanding immediate tax payments
  
• Messages claiming penalties or balances due
  
• Redirects to fraudulent payment portals

These scams often pressure filers with threats of penalties, interest, or enforcement actions.

The real impact of tax scams

Tax scams go far beyond immediate financial loss. Their impact often shows up later in the filing cycle—when problems are harder and more time-consuming to fix.

They commonly result in:

• Rejected or inaccurate filings, requiring corrections and retransmissions
  
• IRS penalty notices triggered by mismatched or missing information
  
• Hours spent investigating and fixing errors, pulling teams away from core work
  
• Confusion and frustration for recipients, especially when incorrect forms are issued
  
• Erosion of trust in the filing process, both internally and with clients or payees
  

For volume filers, these consequences don’t occur in isolation. A single issue can affect hundreds of forms, escalate quickly, and disrupt filing timelines—turning what should be a routine process into a costly operational setback.

How TaxBandits Helps You Stay Protected at Every Stage

Tax scams often succeed by exploiting gaps—unsecured data collection, lack of verification, unclear access controls, and poor visibility into filing activity. TaxBandits helps close these gaps by building safeguards directly into critical stages of the tax filing process.

Here’s how that protection plays out in real terms.

Secure Recipient Data Collection 

One of the earliest—and most critical—stages of tax filing is collecting recipient information. Sharing TINs, names, and addresses through emails or external documents increases the risk of phishing and data misuse.

TaxBandits helps filers securely request, track, and manage W-9 information within a centralized software. Instead of relying on unsecured communication, filers can send W-9 requests directly through the software, monitor request status, and safely store recipient details once they’re received.

Built-In TIN Matching and Audit Issues

Incorrect TINs and name mismatches are not just filing errors—they can also signal fraudulent or manipulated data. TaxBandits’ TIN Matching feature helps verify recipient information against IRS records before filing.

By identifying mismatches early:

• Filers can correct issues before submission
  
• The risk of IRS notices and penalties is reduced
  
• Audit-related complications caused by inaccurate or suspicious data are minimized

This early validation step helps ensure filings are based on verified information, not compromised or incorrect inputs.

Strong Account Security and Identity Protection

Account takeover is one of the fastest-growing threats in tax filing. Stolen credentials can give scammers direct access to filings, recipient data, and payment records.

TaxBandits uses secure login protocols, encryption, and multi-layered authentication to protect filer accounts. These safeguards help ensure that even if credentials are targeted, unauthorized access is significantly harder to achieve.

For filers managing multiple clients or large volumes, this added protection is critical in preventing identity-based fraud and data misuse.

Role-Based Access for Teams and Clients

Not every user needs full access—and scammers often exploit overexposed permissions.

TaxBandits offers role-based access controls, allowing filers to define who can view, edit, or submit information. Whether working with internal teams or external clients, permissions can be tailored to specific responsibilities.

This structure:

• Reduces accidental data changes
  
• Prevents unauthorized filings
  
• Adds accountability across workflows

It also limits the damage potential if a single user account is compromised.

IRS-Authorized, Secure E-Filing

Using unauthorized or lookalike filing services is a common tactic in tax scams. Filing through an IRS-authorized provider helps ensure that returns are submitted through official, compliant channels.

TaxBandits is an IRS-authorized e-file provider, enabling secure electronic transmission of tax forms to the IRS and state agencies. Filers receive clear submission and acceptance updates within the software, reducing reliance on external messages that may be fraudulent. This helps ensure filings are legitimate, traceable, and securely handled from transmission through acceptance.

Safe Form Distribution and Recipient Access

Scams don’t stop after forms are filed. Distribution is another vulnerable point—especially when copies are shared via unsecured email or manual processes.

TaxBandits provides secure options for distributing recipient copies, including recipient portal access and postal mailing services. Recipients can access their forms securely, reducing the risk of intercepted documents, fake distribution links, or unauthorized downloads. It also improves recipient trust by delivering forms through consistent, verified methods.

Final thoughts

Tax scams are evolving, and they can affect anyone—from first-time filers to experienced professionals. But with the right understanding and the right filing software, these risks can be significantly reduced.

By recognizing where scams occur, using secure and authorized software, and relying on built-in protections like The Bandit Commitment, filers can move through tax season with confidence.

Because at the end of the day, tax filing shouldn’t be about fear—it should be about accuracy, control, and peace of mind.