Tax Season Fraud and Financial Scams to Watch For Right Now

Every year as tax season arrives, fraud activity surges. Scammers know that people are dealing with financial documents, expecting refunds, and communicating with financial institutions — and they exploit that context with increasing sophistication.

The IRS, the Federal Trade Commission, and Illinois state agencies consistently identify the months of February through April as peak periods for tax-related fraud. Understanding the current threat landscape and knowing when to bring in professional help can protect your finances, your identity, and your business.

The Most Common Tax Season Scams Right Now

IRS impersonation calls and messages remain the most reported tax scam every year. Fraudsters contact individuals by phone, email, or text claiming to be IRS agents demanding immediate payment for a tax debt. The IRS does not initiate contact by phone, email, or text — their first contact is always by mail. Any urgent demand for payment via wire transfer, gift cards, or cryptocurrency is a scam without exception.

Phishing emails that appear to come from tax software companies, financial institutions, or the IRS itself are designed to capture login credentials, Social Security numbers, and financial account information. These emails are increasingly convincing — using legitimate logos, formatting, and language that closely mirrors real communications.

Refund fraud involves a criminal filing a tax return in your name using your Social Security number before you file your own return, capturing your refund. If you discover that a return has already been filed in your name, contact the IRS Identity Protection Specialized Unit immediately.

Ghost tax preparers — unlicensed individuals who prepare returns, pocket a portion of refunds, and then disappear — peak during this season. Always verify the credentials and PTIN number of anyone preparing your taxes.

Business-Specific Tax Season Fraud

Payroll diversion scams target business employees in HR and finance with convincing emails that appear to come from executives — requesting changes to direct deposit information before payroll runs. Once changed, payroll is diverted to fraudster accounts and cannot be recovered.

Vendor invoice fraud increases during tax season as businesses process a higher volume of financial documents. False invoices submitted during high-volume periods are more likely to be approved without full scrutiny.

Employee W-2 phishing involves criminals posing as company executives to request W-2 information for all employees from the HR or payroll department. This information is then used to file fraudulent returns in employees' names.

How a Private Investigator Can Help

When fraud has already occurred — a stolen refund, a diverted payment, an identity compromise — a private investigator can assist with documenting the incident for law enforcement reporting, insurance claims, and civil recovery proceedings.

For businesses that suspect internal involvement in a fraud scheme — an employee who approved a false invoice, an HR staff member who responded to a phishing request — a licensed PI can investigate without alerting the subject or compromising the integrity of any subsequent legal action.

Supreme Investigations conducts financial fraud investigations, background research on suspicious parties, and documentation that supports law enforcement complaints and civil litigation.

Immediate Steps If You Suspect Tax Fraud

If you believe your identity has been used to file a fraudulent return, file an IRS Identity Theft Affidavit using Form 14039 immediately and contact the IRS Identity Protection Specialized Unit. Place a fraud alert or security freeze on your credit files with all three major bureaus. File a report with the FTC at identitytheft.gov. Contact the Illinois Attorney General's office if the fraud occurred in Illinois.

Document everything. Keep records of every communication, every account statement, and every interaction related to the fraud. This documentation is the foundation of any recovery or legal action.

If you or your business has been targeted by tax season fraud in the Chicago area and need professional investigative or documentation assistance, contact Supreme Investigations. We are here to help.

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