Don't Get Duped: 10 Tips to Avoid Tax Scams in 2026

Tax season often feels like a race against the clock, but the real challenge isn't just meeting the filing deadline—it’s staying one step ahead of fraudsters. Every year, scammers refine their tactics, using deceptive emails, high-pressure phone calls, and "too-good-to-be-true" refund promises to take advantage of hardworking taxpayers.

As you navigate the 2026 tax season, protecting your identity and your hard-earned money is more important than ever. Here are 10 tips to help you keep your personal information secure.

1. Know the Red Flags

   Fraudsters often masquerade as the IRS, tax professionals, or even your financial institution. Watch out for phishing emails, "urgent" texts about your tax status, or callers demanding immediate payment via wire transfer or gift cards. Take a quiz to see if you are susceptible to fraud and common scams.

2. Verify IRS Communication

   It’s important to remember that the IRS will never:

   • Call to demand instant payment over the phone.
   • Threaten you with immediate law enforcement action or arrest.
   • Ask for personal or financial information via text message, email, or social media.

   If you receive a suspicious message, contact the IRS directly at irs.gov to verify its legitimacy.

3. Use Secure Filing Platforms

   When filing your taxes online, ensure you are using a trusted provider with encrypted connections (look for the "s" in "https" in the URL). Always enable multi-factor authentication (MFA) on your tax accounts for an added layer of security.

   (MFA) on tax accounts is highly recommended and, in many cases, required to protect sensitive personal and financial information. Major platforms like the IRS (via ID.me), TurboTax, and professional tax software now require or strongly encourage MFA, usually through text codes, phone calls, or authenticator apps. 

4. Be Wary of Ghost Preparers

   Avoid tax preparers who refuse to sign your return or those who base their fees on a percentage of your refund. A legitimate professional will always sign as the paid preparer and provide you with a copy of the return. In addition, legitimate tax preparers usually charge a set flat fee, often based on the complexity of the tax return, the number of forms required, or an hourly rate. Charging a percentage of the refund is considered unethical, is illegal for most tax services, and is a major red flag for fraudulent activity. 

5. Protect Your Personal Data

   Treat your Social Security number and financial documents like gold. Shred any outdated, sensitive documents and never share your banking details over unsecure channels like email or public Wi-Fi.

6. File Early

   One of the best ways to beat a scammer is to file your return as soon as you have all your documents. By filing early, you reduce the window of opportunity for a fraudster to use your identity to file a fraudulent return or claim your refund.

7. Monitor Your Refund Status

   You can check the status of your refund and view your tax transcripts directly through the official IRS website. Regularly monitoring your refund status helps you spot any unauthorized activity quickly.

8. Choose Direct Deposit

   Direct deposit is the fastest and most secure way to receive your refund. It eliminates the risk of a paper check being lost or stolen. Plus, your refund goes straight into your account, which gives you faster and more convenient access to your funds.

9. Report Suspicious Activity

   If you encounter a tax scam, report it. You can send phishing emails to [email protected] and report identity theft at identitytheft.gov. If you believe your credit union account information has been compromised, contact us immediately.

10. Work with a Trusted Financial Institution

    As the oldest locally established financial institution in the Lowcountry, South Carolina Federal earned a five star rating from Bauer Financial for strength and security in 2025.

    At South Carolina Federal, your security is our priority. We offer a variety of tools and resources in our Security Center to help you keep your assets safe. If you are ever unsure about a financial request or communication, we are here to help you navigate it safely.