Almost one in four Americans say they or someone they know has been a victim of a tax scam, and unfortunately, filing season is an opportune time for scammers.
According to a McAfee survey*, older adults (age 65-74) in tax season face a greater risk of financial losses than other age groups. However, adults aged 45-54 suffer the highest reported outlays, with some losses over $10,000, and even young adults (18-24) can lose up to $1,000 per scam.
So how are people becoming targets?
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Well, partly with the power of artificial intelligence (AI). “Smarter” scams use computerized methods to create phony websites, counterfeit emails, and fake voices on phone calls. We’ll cover what these AI scams are, who they target, and a few tips on determining whether a situation is a scam or the real deal.
*McAfee is a cybersecurity company. The surveyed participants consisted of 3,000 U.S. adults, 18 and older, who responded in February 2025.
How do tax scams work?
A tax scam may start like this: You receive an urgent phone call from what looks like the IRS demanding payment. Once you respond, the scammer will ask for personal information like your bank account and Social Security number.
Scarily enough, they can use what you provide to steal your cash or your identity, sometimes both, and leave you with a financial headache.
To make matters worse, taxpayers may spend years resolving fraud issues, as the average processing time for identity theft cases at the IRS is 506 days. (And in some cases, retirees can face significant tax bills due to fraud).
Tax refund scam texts and AI scammers
Tax scams have existed for decades. But, as McAfee reports, technology has made them trickier to spot. Below are a few examples of how tax scammers utilize the power of AI during filing season:
- Phony IRS messages — almost half of Americans receive fraudulent tax-related messages in their email, social media, or phone urging them to act quickly to a request from “the IRS" or state tax authority. Scammers can also use your voicemail. With so-called “deepfake” audio, AI imitates the voice of someone you trust, like a friend or IRS official, to trick you into handing over confidential information.
- Fake tax refunds — over a third of surveyed respondents say they (or someone they know) received scam texts, emails, or other messages about a tax refund that contained a malicious link. These smishing tax scams can be generated with AI to look almost identical to “real” sources, and, once clicked, the link will take you to a website where your information can be stolen.
- Impersonated tax preparation services — 33% of people say they (or someone they know) received a fake message from a tax prep service that urged them to click a link to log in. However, the website was fake as scammers can use AI to replicate legitimate websites.
Over half of adults surveyed say these scam methods are becoming more sophisticated, with 87% worried that AI is making scams more difficult to spot — and that’s a big deal. According to the Federal Trade Commission (FTC), last year’s consumers reported a 25% increase in fraud losses, at $12.5 billion. Financial fraud in 2025 could be much higher.
Main targets of tax scams: Retirees and middle-aged adults
Below is a breakdown of tax fraud scams by various demographics, per McAfee’s survey:
- Young adults (18-24) experienced the most scams, with scammers asking for birth dates and bank account information, which could lead to identity theft.
- Some middle-aged adults (35-54) were asked for their Social Security or Tax ID numbers, and over a third received fraudulent back tax payment demands.
- Older adults (65-74) were most likely to be asked for information used in payment scams, with 37% receiving demands for immediate back tax payments, and 45% reporting fake tax refund scams requesting banking details.
- Men were three times more likely to receive cryptocurrency scam messages.
- Women were more likely to receive tax debt threats.
Protect against tax scams: What to know
There are several ways you may protect yourself and your family from falling victim to a tax scam, even if AI is involved:
- Ignore emails, texts, or any other kind of “unexpected” communication from the IRS. The tax agency will never ask for immediate payment via these methods, nor will the IRS ask you to pay in an unusual way (cryptocurrency, wire transfer service, gift card, etc.). If in doubt, call a valid phone number directly from the IRS website to confirm the scam.
- Take your time. If an “urgent” message is preying on your busy schedule, stop and think. Don’t click on any links or make a step toward paying a “bill” until you have time to consider all the facts.
- If in doubt, talk to someone you trust — a friend, family member, or neighbor. Explain the message and the payment situation. The FTC recommends this step for those unsure if something is a scam.
AI phishing attempts, phony websites, fake tax refunds, and other scam methodologies are rising in 2025. So whether you’re an older adult or a Gen Z-er, be alert this filing season — and beyond.
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