Warning! Gen Z Is Getting Hit with These Tricky Tax Scams—Here’s What You Need to Know
Tax season stress is real. Whether you hire an accountant, prepare your taxes using an online service or tackle them yourself, April 15th looms large on the calendar. Anxiety over filing, filing on time and filing correctly leaves people vulnerable to tricky tax scams. Scammers come in—as scammers do—to prey on weaknesses and fears.
“While it can be tempting to rush through your tax return filing as quickly as possible, it’s important to remain diligent throughout the process to protect your finances from both commonly used scams and emerging threats,” explains Sean Murphy, PhD, a cybersecurity professional with over three decades of experience, including 21 years doing risk management work for the United States Air Force. “Criminals often pose as the IRS, tax preparers or financial institutions to steal money and personal information.”
When we think of people getting scammed online, we usually think of older adults, who can be less internet savvy. But it’s actually Gen Z, who are getting hit with tricky tax scams this season. Keep reading to learn more about why scammers are targeting 18- to 24-year-olds and to get tips on how we can all protect ourselves from a tax scam.
Get Reader’s Digest’s Read Up newsletter for more scam news, humor, travel, tech and fun facts all week long.
How common are tax scams?
According to McAfee’s consumer survey on tax scams, Gen Z is getting hit hard, with 40% saying they or someone they know has been scammed—more than any other age group. But just because Gen Z is a primary target for tax scams doesn’t mean older generations are immune. In fact, those ages 65 to 74 lost the most money, with 40% of men in that age group who say they were victims of a tax scam losing between $751 and $1,000, and 50% of the women in that age group who were victims saying they lost between $2,501 and $5,000.
Why are scammers targeting Gen Z with tax scams?
Born between 1997 and 2012, Gen Z are digital natives, and they have a different relationship with technology than older generations, who remember life before everything was communicated via text and email. “Scammers go where the opportunity is,” Karnik says, a reference to the fact that Gen Z is more likely to file taxes online, use mobile apps and trust digital platforms. “Gen Z is looking for convenience or a good deal—which scammers take advantage of.”
Online scams all follow a similar formula, and fake IRS websites, fraudulent tax-prep software and scam emails promising free filing services are all designed to look legitimate. “Since Gen Z is constantly on their phones, scammers are also hitting them with phishing texts, social media scams and even deepfake audio messages that sound eerily real,” Karnik explains. “It’s not just about tricking people—it’s about creating just enough urgency and fear to make them act before they realize something’s off.”
Why are more Gen Zers falling for these tax scams?
Gen Zers are falling for tax scams partly because they’re new to paying taxes—which makes them easier to deceive—and also because of their online habits. “Scammers target Gen Z because they are new taxpayers navigating careers, finances and major life transitions, often lacking familiarity with the filing process, tax programs and basic federal, state and local tax laws,” explains Greg Pepper, senior security architect at Check Point Software.
Gen Z generally trusts digital interactions more than older generations, making them prone to phishing scams. Plus, older generations are more likely to rely on professional tax preparers and will go to official government sites for information, while Gen Z may turn to TikTok or other social media sites for tax advice, which may lead them to misleading or fraudulent links. Pepper breaks down a few key reasons Gen Z is at risk of falling for tax scams.
- Over-trust in social media: Gen Z depends heavily on TikTok, Instagram and other platforms for financial advice.
- Lack of fact-checking: Many Gen Zers fail to validate tax-related claims with official sources like the IRS.
- Over-reliance on convenience: Gen Z is more likely to fall for quick-fix solutions that promise instant refunds or appealing deductions.
What kind of info are scammers asking for?
One thing that makes tax scams tricky is that the information scammers ask for is actually the exact same information you need to provide to a legitimate tax preparer. This info typically includes your name, date of birth, address, Social Security number, bank account number and credit card details. “Scammers aren’t just after a quick buck—they’re after personal details they can use for long-term fraud,” Karnik says.
Many tax scam victims report being asked for their Social Security number or tax ID, which criminals may use to file fake tax returns and claim refunds, or they want your bank account and credit card information. Scammers might use this information to make payments to themselves or purchases, or they might even collect enough information to take out a loan in your name. In more sinister scams, your data might be sold on the dark web for further exploitation.
What are the tax scams to watch out for this year?
Overall, scams are getting more sophisticated, and knowing what tax scams to be on the lookout for is a huge factor when it comes to staying safe this tax season. Scammers use AI, phishing and impersonation tactics—anything to look legit—and text scams are on the rise. “McAfee data shows that 76% of all tax-themed scam activity happens over mobile text, making it the dominant delivery method,” Karnik says. “Many of these messages use shortened URLs to disguise fraudulent links, making it harder for people to recognize the fraud before clicking.
Pepper details some of the specific tax scams to look out for this year:
- False tax-reduction schemes: Scammers claim they can legally reduce taxable income to zero, tricking individuals into filing fraudulent returns.
- Instant tax-refund payments: Some fraudulent tax preparers offer immediate payouts on expected refunds but charge excessive fees or steal refund checks outright.
- Fake “tax experts” on social media: Misinformation is rampant, leading young taxpayers to unknowingly commit fraud or fall victim to IRS impersonators.
How can you identify—and avoid—a tax scam?
The primary way to identify and avoid becoming a victim of a tax scam is to understand what the IRS will and won’t do. Ian Bednowitz, general manager of identity and privacy at LifeLock, shares his tips for spotting tax scams and avoiding fraudulent schemes.
- Unsolicited communication: Be wary of unsolicited communications claiming to be from the IRS. The IRS will never contact you via email, text or social media to request personal or financial information.
- Pressure tactics: Scammers often use pressure tactics, such as threats of arrest or immediate action, to intimidate victims into providing personal information or making payments.
- Request for payment: The IRS will never demand immediate payment or request payment via untraceable methods like gift cards or cash apps.
- Unofficial tax forms: Verify the legitimacy of IRS forms and notices by checking the official IRS website or contacting the IRS directly.
- Fake IRS credentials If someone calls you out of the blue claiming to be from the IRS, it’s a scam. An IRS employee will never call you without sending a letter or bill in the mail first, and they will never demand immediate payment.
- Threats and intimidation: The IRS cannot revoke a driver’s license, business license or immigration status and will not make such a threat.
How else can you stay safe when filing your taxes?
Like we said above, tax season is stressful, and stress can lead to unnecessary mistakes. If you want to stay safe while filing your taxes, Karnik suggests the following:
- Be cautious with tax websites: Scammers create fake versions of real tax-prep sites. Always type web addresses directly into your browser instead of clicking on links from emails or ads.
- Monitor your credit and personal data: Regularly checking your credit report can help you spot suspicious activity early. You can also remove your info from data broker sites to make it harder for scammers to reach you.
- Use security tools: AI-powered scam detectors and identity-protection services can help block phishing attempts and alert you if your personal data is at risk.
- Practice vigilance: A little extra vigilance now can prevent major headaches later—when in doubt, always double-check before sharing any personal or financial information.
About the experts
|
Why trust us
Reader’s Digest has published hundreds of articles on personal technology, arming readers with the knowledge to protect themselves against cybersecurity threats and internet scams as well as revealing the best tips, tricks and shortcuts for computers, cellphones, apps, texting, social media and more. For this piece on tax scams, Jaime Stathis tapped her experience as a longtime journalist to ensure that all information is accurate and offers the best possible advice to readers. We rely on credentialed experts with personal experience and know-how as well as primary sources including tech companies, professional organizations and academic institutions. We verify all facts and data and revisit them over time to ensure they remain accurate and up to date. Read more about our team, our contributors and our editorial policies.
Sources:
- McAfee: “Financial Losses from Tax Scams Top $1,000 on Average—and Gen Z is a Growing Target”
- Better Business Bureau: “2024 BBB Scam Tracker Risk Report”
- Sean Murphy, PhD, senior vice president and chief information security officer at BECU; email interview, March 2025
- Abhishek Karnik, head of threat research at McAfee; email interview, March 2025
- Greg Pepper, senior security architect at Check Point Software; email interview, March 2025
- Ian Bednowitz, general manager of identity and privacy at LifeLock; email interview, March 2025
The post Warning! Gen Z Is Getting Hit with These Tricky Tax Scams—Here’s What You Need to Know appeared first on Reader's Digest.
from Reader's Digest https://ift.tt/tWXY0oZ
Comments
Post a Comment