Who fraudsters target during tax season
Tax season fraud does not discriminate. However, certain groups are targeted more frequently because of financial position, life stage, or perceived vulnerability.
Older adults
Older adults remain a primary target, particularly in impersonation scams. Many retirees have accumulated savings across deposit, brokerage, and retirement accounts. That makes them attractive to criminals looking for larger balances.
Equally important, some older individuals may be more inclined to trust a caller who claims to represent the IRS, the Treasury Department, or law enforcement. Fraudsters use official language, badge numbers, and fabricated case IDs to reinforce credibility. They often spoof phone numbers to make the call appear legitimate.
For banks and credit unions, behavior can be as important as dollar amount. Warning signs may include:
- Sudden liquidation of investment or retirement accounts
- Large wire transfers after repeated phone calls
- Customers expressing fear of arrest or asset seizure
- Reluctance to discuss the purpose of a withdrawal
Frontline staff trained to recognize elder financial exploitation and fraud tactics in general can stop tax season fraud before funds leave the institution.
First-time filers and young adults
Young adults and first-time filers often lack experience with IRS processes. They may assume that email, text, or phone outreach is regular. Fraudsters rely on that uncertainty.
Many scams aimed at this group focus on refunds. Messages that claim a refund is delayed or requires verification can feel believable. When someone is expecting money, urgency does not seem suspicious.
Younger consumers may also be more likely to click links sent via text or social media. That increases exposure to credential harvesting and identity theft tied to tax season fraud.
From an institutional perspective, this activity can look different:
- Multiple failed login attempts followed by password resets
- New accounts opened to receive direct deposit refunds
- Rapid outbound transfers after a refund posts
Connecting these signals across channels is essential.
Immigrants and non-native English speakers
Fraudsters frequently tailor tax season fraud narratives to immigrants and non-native English speakers. Threats may include deportation, visa revocation, or immediate legal action.
These scams are heavily intimidation-based. Victims may be hesitant to question someone claiming to be a government official. Language barriers can make it harder to verify information or seek help.
Financial institutions serving diverse communities should consider:
- Offering fraud education materials in multiple languages
- Training staff to recognize fear-based narratives tied to immigration status
- Establishing clear escalation procedures when a customer appears distressed
Across all groups, transaction context matters. Significant or unusual withdrawals tied to urgent stories about government investigations should raise red flags. Empowering employees to pause a transaction and escalate concerns can significantly reduce losses.
