IRS Fraud Statistics: How Common Is Tax Identity Theft?

Key Takeaways  

• The IRS selected about 7.5 million tax returns through its identity theft filters in 2024 and 2025 (data through November 2025), and about 329,000 of those returns were confirmed as identity theft, according to the Treasury Inspector General for Tax Administration (TIGTA). 

•  The IRS prevented approximately $7 billion in fraudulent refunds over the same period. 

•  Being selected does not mean a return is fraudulent. About 52% of returns selected in processing year 2024 turned out to be legitimate, so honest taxpayers may need to verify their identity before receiving a refund. 

•  Resolving an identity theft case takes far longer than catching a fraudulent return. The National Taxpayer Advocate reported average delays of about 21 months in fiscal year 2025 and about 20 months in fiscal year 2026, per the Advocate’s June 2026 report. 

• Common threats include IRS impersonation by email, text, and AI-enabled phone calls, ghost preparers, and misleading tax advice on social media. 

• An IRS Identity Protection PIN, filing early, protecting your Social Security number, and verifying unexpected IRS contact through IRS.gov can reduce your risk. 

• If you suspect tax identity theft, respond to any IRS notice, follow the instructions at IRS.gov/identitytheft, and report the theft at IdentityTheft.gov. 

Tax-related identity theft is a significant concern for taxpayers, particularly during filing season when criminals look for opportunities to steal personal information and claim fraudulent refunds. Using stolen Social Security numbers and other identifying details, scammers can file tax returns in someone else’s name, redirect refunds, and create complications that take months or even years to resolve. 

The financial impact is substantial. According to a May 2026 report from the Treasury Inspector General for Tax Administration (TIGTA), the IRS prevented approximately $7 billion in fraudulent refunds during calendar years 2024 and 2025, based on data through November 2025. During that period, the agency selected approximately 7.5 million tax returns through its identity theft filters, and about 329,000 of those returns were confirmed as identity theft. 

Although the IRS continues improving its fraud detection systems, taxpayers remain vulnerable to identity theft, phishing attempts, fraudulent tax preparers, and increasingly sophisticated scams. Understanding the latest IRS fraud statistics, recognizing warning signs, and taking preventive measures can help taxpayers protect their identities and refunds. 

How Common Is Tax Identity Theft in the United States? 

Tax identity theft remains a significant problem in the United States. Criminals commonly use stolen Social Security numbers (SSNs) to file fraudulent returns and claim refunds before legitimate taxpayers have an opportunity to file. Although the IRS has improved its detection systems, millions of returns are still selected for additional screening. 

Not every suspicious return represents confirmed identity theft. Some legitimate returns trigger fraud detection filters and require additional verification. 

How Many Tax Returns Does the IRS Flag for Identity Theft? 

According to TIGTA’s May 2026 audit, the IRS selected approximately 7.5 million individual tax returns through its identity theft filters during calendar years 2024 and 2025, based on data through November 2025. 

These filters identify suspicious characteristics associated with identity theft. When a return is selected, the IRS generally prevents it from posting to the taxpayer’s account until the agency can authenticate the filing. 

Importantly, the 7.5 million figure does not represent confirmed identity theft cases. Some selected returns belong to legitimate taxpayers who must complete additional screening before receiving their refunds. 

TIGTA also found that the share of selected returns that turned out to be legitimate dropped from 55% in processing year 2023 to 52% in processing year 2024. In other words, about half of the returns the filters pulled for review were filed by the real taxpayer. Even so, TIGTA noted that the 2.4 million legitimate returns selected in calendar year 2024 represented about 1.4% of the 163.5 million returns filed that year. 

For example, someone who files a legitimate return may receive an identity verification notice because their return triggered a fraud detection filter. This does not necessarily mean someone stole their identity, but the taxpayer may need to verify their information before the IRS releases their refund. 

How Much Money Does Tax Identity Theft Cost? 

Tax identity theft can cause significant financial losses when criminals successfully obtain refunds using stolen taxpayer information. 

The IRS prevented approximately $7 billion in fraudulent refunds during calendar years 2024 and 2025, according to TIGTA, based on data through November 2025. This represents refunds the agency stopped from being improperly issued, not money it actually lost. 

Beyond government revenue, identity theft can financially affect taxpayers through: 

• Delayed refunds while the IRS investigates suspicious filings. 

• Expenses associated with recovering stolen personal information. 

• Time spent responding to IRS notices and verifying identities. 

• Financial difficulties for taxpayers who depend on their refunds. 

Even when the IRS prevents a fraudulent refund, resolving the resulting identity theft case can create considerable stress and uncertainty. 

Are Tax Identity Theft Cases Increasing? 

Determining whether tax identity theft is increasing requires looking beyond the number of returns flagged by the IRS. Changes in detection technology, reporting practices, and fraud prevention methods can influence annual statistics. 

TIGTA’s data shows the IRS selected about 4.4 million returns in calendar year 2024 and about 3.0 million in calendar year 2025, with identity theft confirmed on about 185,000 and 144,000 returns, respectively. Because the 2025 figures only run through November 2025, they should not be read as a decline. 

Outside reporting shows that tax-related identity theft remains a concern. In an April 2025 public service announcement, the FBI said its Internet Crime Complaint Center (IC3) had received more than 1,000 complaints about identity theft connected to tax returns over the previous year, a 26% increase from the year before. 

Criminals are also adopting new technologies, including artificial intelligence (AI), to create convincing impersonation attempts and phishing campaigns. These developments make protecting personal information increasingly important. 

What Are the Most Common Types of Tax Identity Theft and IRS Fraud? 

IRS fraud includes schemes designed to steal taxpayer information, obtain fraudulent refunds, or trick individuals into making payments they do not owe. Tax refund identity theft is one of the most recognizable forms, but criminals use several other methods to target taxpayers and tax professionals. 

Tax Refund Identity Theft 

Tax refund identity theft occurs when someone uses stolen personal information to file a fraudulent tax return and claim a refund in another person’s name. 

Criminals may obtain Social Security numbers, dates of birth, and addresses through data breaches, phishing attacks, or stolen documents. They then submit fraudulent returns, sometimes using fabricated income and withholding information, and direct refunds to accounts they control. 

For example, someone planning to file their return in March may discover that a criminal already filed one using their Social Security number in February. The IRS may reject the legitimate electronic filing because another return has already been submitted under that identity. 

The taxpayer must then work with the IRS to verify their identity and resolve the fraudulent filing. 

IRS Impersonation Scams Through Emails and Text Messages 

Phishing emails and smishing text messages impersonate the IRS to trick taxpayers into sharing sensitive information. 

These messages may claim that someone has an outstanding balance, an unclaimed refund, or an account problem requiring immediate attention. Links often lead to fake IRS websites designed to collect Social Security numbers, banking information, and passwords. 

Some messages also contain malicious attachments or links that install malware. 

The IRS warns that it does not initiate contact through unsolicited emails, text messages, or social media messages to request personal or financial information. Taxpayers should avoid clicking unexpected links or providing information in response to suspicious messages. 

Phone Scams and AI-Generated IRS Impersonations 

Criminals also impersonate IRS employees through phone calls, robocalls, and spoofed caller IDs. They may threaten arrest, legal action, or wage garnishment unless taxpayers make immediate payments. Some scammers now use AI-generated voices to make impersonation attempts more convincing. 

However, the IRS generally contacts taxpayers by mail first. It does not leave urgent, threatening prerecorded messages, call to demand immediate payment, threaten arrest, or demand payment by a specific method such as a gift card or prepaid debit card. 

If someone receives a threatening call claiming to be from the IRS, they should avoid sharing personal information and independently verify the situation through IRS.gov. 

Social Media Tax Scams and False Tax Advice 

Social media platforms can spread misleading tax information and fraudulent refund schemes. Some posts promote supposed tax loopholes or filing tricks that encourage individuals to claim credits or report income and withholding they cannot substantiate. The IRS has warned about misleading advice involving overstated withholding and fabricated income information. 

For example, a viral video might claim that entering fabricated withholding amounts on a tax return can generate a larger refund. Following this advice could result in refund delays, penalties, or additional IRS scrutiny. 

Taxpayers should verify tax advice through official IRS resources or qualified professionals rather than relying on unverified online claims. 

Tax Preparer Fraud and Stolen Taxpayer Information 

Tax preparers handle sensitive information, including Social Security numbers, income records, and banking details. Dishonest preparers may misuse this information, inflate deductions, claim ineligible credits, or redirect refunds. 

One warning sign is a ghost preparer who prepares returns but refuses to sign them or include their required Preparer Tax Identification Number (PTIN). 

Because taxpayers remain responsible for the information submitted on their returns, they should verify a preparer’s credentials, review returns before signing, and avoid anyone promising unusually large refunds. 

What Are the Latest IRS Tax Fraud Statistics? 

Recent IRS fraud statistics demonstrate the scale of the agency’s efforts to identify suspicious returns and prevent fraudulent refunds. However, selected returns, confirmed identity theft cases, and prevented refunds represent different stages of the detection process. 

IRS Fraud Statistics	Reported Figure
Returns selected through IRS identity theft filters in 2024–2025 (data through November 2025)	Approximately 7.5 million
Fraudulent refunds prevented in 2024–2025 (data through November 2025)	Approximately $7 billion
Identity theft filter selections resolved without taxpayer notification (2024–2025, as of November 2025)	Approximately 955,000
Share of returns selected by identity theft filters that turned out to be legitimate (processing year 2024)	52%
FBI tax-return identity theft complaints during the year before April 2025	More than 1,000
Increase in FBI tax-return identity theft complaints	26%
Average time to resolve IRS identity theft victim assistance cases	About 21 months (fiscal year 2025); about 20 months (fiscal year 2026, per the Advocate’s June 2026 report)

These figures come from TIGTA, the FBI, and the National Taxpayer Advocate. They cover different reporting periods and should not be interpreted as a single count of confirmed identity theft victims. 

How Many Fraudulent Tax Returns Does the IRS Catch Each Year? 

The IRS uses identity theft filters and other detection methods to identify suspicious tax returns before issuing refunds. 

TIGTA reported that approximately 7.5 million returns were selected through identity theft filters during calendar years 2024 and 2025, based on data through November 2025. However, selection does not automatically mean a return was fraudulent. 

The IRS reviews these returns to determine whether additional verification is necessary. TIGTA found that approximately 955,000 identity theft filter selections were resolved without taxpayer notification during 2024 and 2025, as of November 2025. 

This demonstrates that the IRS can sometimes resolve potential concerns through internal reviews without requiring taxpayers to take action. 

How Much Taxpayer Money Does the IRS Prevent From Being Lost to Fraud? 

The IRS prevented approximately $7 billion in fraudulent refunds during calendar years 2024 and 2025, according to TIGTA, based on data through November 2025. The agency also works with state tax agencies, financial institutions, and tax industry representatives through the Information Sharing and Analysis Center (ISAC). These partnerships help organizations share information about emerging fraud schemes and suspicious filings. 

During fiscal year 2024, external alerts helped the IRS stop $9.2 million in refunds associated with confirmed identity theft returns and identify another $49.3 million in refunds associated with potential identity theft returns. These efforts demonstrate the importance of collaboration in preventing fraudulent tax refunds. 

How Long Does It Take to Resolve Tax Identity Theft Cases? 

Although the IRS prevents many fraudulent refunds, resolving identity theft cases can take considerably longer. According to the National Taxpayer Advocate’s 2025 Annual Report to Congress, the IRS ended fiscal year 2025 with roughly 316,000 identity theft victim assistance cases in inventory, and resolving them took an average of about 21 months. The Advocate’s June 2026 Objectives Report found delays of about 20 months and more than half a million identity theft cases pending at the end of the 2026 filing season. 

These delays can create financial hardships for taxpayers who depend on their refunds to cover household expenses, medical bills, and other obligations. 

The process may require identity verification, supporting documentation, responses to IRS notices, and additional investigation. This makes prevention especially important for avoiding lengthy recovery periods. 

What Are the Warning Signs of Tax Identity Theft? 

Tax identity theft is not always immediately obvious. Many taxpayers discover the problem only after attempting to file a return or receiving an unexpected IRS notice. Recognizing unusual activity involving tax accounts and personal information can help individuals identify potential problems sooner. 

The IRS Rejects Your Tax Return Because One Was Already Filed 

An electronic filing rejection stating that another return has already been submitted using your Social Security number can be a warning sign of tax identity theft. 

However, this does not automatically prove fraud. Other issues, such as a dependent being claimed on another return, can also cause rejection. Review the rejection message carefully and follow IRS instructions for reporting suspected identity theft. 

You Receive an IRS Notice About Income You Did Not Earn 

Unexpected tax documents or IRS notices involving unfamiliar income may indicate that someone used your information to obtain employment or report fraudulent earnings. 

For example, you might receive a Form W-2 from an employer you never worked for or a Form 1099 reporting income you did not receive. Although administrative errors are possible, taxpayers should investigate unfamiliar income records rather than ignore them. 

Your IRS Account Shows Unfamiliar Activity  

Unexpected changes to your IRS Online Account, unfamiliar tax filings, or suspicious account activity may indicate unauthorized access. 

Secure your account with a strong password and multifactor authentication where available. If you notice suspicious activity, follow IRS identity theft recovery instructions and review other financial accounts. 

You Receive Unexpected IRS Identity Verification Requests 

The IRS may send a notice requesting identity verification when a return triggers a fraud detection filter. However, criminals also impersonate IRS representatives to obtain sensitive information. 

Before responding, verify the notice through IRS.gov. Avoid using unfamiliar phone numbers or links included in suspicious communications. 

How Can You Protect Yourself From Tax Identity Theft? 

Protecting personal information is one of the most effective ways to reduce the risk of tax identity theft. Although taxpayers cannot prevent every data breach or fraud attempt, several precautions can make it more difficult for criminals to misuse their information. 

Get an IRS Identity Protection PIN (IP PIN) 

An Identity Protection Personal Identification Number (IP PIN) is a six-digit number assigned by the IRS to help prevent someone else from filing a federal income tax return using your taxpayer identification number. 

The IRS uses this number to verify that a return belongs to the authorized taxpayer. Anyone enrolled in the program must include their current IP PIN when filing a federal return. 

An IP PIN is valid for one calendar year, and a new one is generated each year. Anyone with a Social Security number or ITIN who can verify their identity can request one through their IRS Online Account. If you enroll online, you will need to log back in each year to retrieve your new IP PIN. Confirmed identity theft victims are enrolled automatically and receive a new IP PIN by mail each year. The IRS will never ask for your IP PIN, so share it only with your tax professional or tax software when you are ready to file. 

File Your Tax Return Early 

Filing early can reduce the opportunity for criminals to submit fraudulent returns using your information first. Tax identity thieves often attempt to file early in the season to claim refunds before legitimate taxpayers submit their returns. Filing early does not guarantee protection, but it can help reduce this window of opportunity. 

Make sure you have received the necessary tax documents, including Forms W-2 and 1099, before submitting your return. 

Protect Your Social Security Number and Financial Information 

Your Social Security number is one of the most valuable pieces of information identity thieves can obtain. Avoid sharing it unnecessarily and use caution when providing personal information online or over the phone. 

Additional precautions include: 

• Store tax documents and financial records securely. 

• Shred paperwork containing sensitive information before discarding it. 

• Use strong, unique passwords for financial and tax accounts. 

• Enable multifactor authentication. 

• Avoid accessing financial accounts through unsecured public Wi-Fi. 

• Keep devices and security software updated. 

• Monitor credit reports and financial accounts for unfamiliar activity. 

If your information is exposed in a data breach, determine what was compromised and take steps to secure affected accounts. 

Verify IRS Communications Before Responding 

Scammers frequently impersonate the IRS through emails, text messages, phone calls, and social media accounts. 

Be cautious of communications that threaten immediate arrest, demand payment through gift cards or cryptocurrency, promise unexpected refunds in exchange for personal information, or pressure you to provide sensitive details immediately. 

The IRS generally initiates contact through traditional mail. When in doubt, visit IRS.gov directly to verify whether a communication is legitimate. 

Work With a Reputable Tax Professional 

A qualified tax professional can help prepare accurate returns and handle sensitive financial information appropriately. Verify a preparer’s credentials, review your completed return before signing, and make sure they provide their required identifying information. Avoid preparers who promise guaranteed refunds, ask you to sign blank returns, or encourage inaccurate reporting. 

What Should You Do If You Become a Victim of Tax Identity Theft? 

If someone uses your personal information to file a fraudulent tax return, acting quickly can help limit additional damage. The IRS provides procedures for reporting suspected identity theft, verifying legitimate returns, and recovering access to compromised tax accounts. 

Report Tax Identity Theft to the IRS 

If you suspect someone filed a fraudulent federal income tax return using your Social Security number, visit the IRS Identity Theft Central website for instructions.  

Depending on your circumstances, you may need to submit Form 14039, Identity Theft Affidavit. However, not every situation requires this form, so follow the instructions in any IRS notice you receive. 

If your electronic return is rejected because someone already filed using your Social Security number, the IRS generally directs you to complete Form 14039, attach it to a paper copy of your legitimate return, and mail both to the IRS. Keep copies of all correspondence and supporting documentation. 

Secure Your Financial Accounts and Personal Information 

Change passwords for affected accounts, particularly email, banking, and tax-related accounts. Enable multifactor authentication and contact financial institutions if you suspect unauthorized access. 

You may also consider placing a fraud alert or credit freeze with the major credit bureaus to make it more difficult for criminals to open accounts using your information. The Federal Trade Commission’s IdentityTheft.gov website provides additional recovery guidance. 

Monitor Your IRS Account and Tax Records 

Continue monitoring your IRS account and tax records for unfamiliar activity. Review tax account information, watch for unexpected notices, and respond to identity verification requests. 

You should also monitor Social Security earnings records for wages reported by employers you do not recognize. Keep a record of IRS correspondence, phone calls, and submitted documents to make it easier to follow up on unresolved issues. 

Report Tax Scams and Fraudulent Communications 

Taxpayers can report suspicious communications and suspected fraud through several government resources: 

• IRS phishing emails: Forward suspicious IRS-related emails to phishing@irs.gov. 

• IRS tax fraud: Visit IRS.gov/SubmitATip to report suspected tax fraud and other violations. 

• Identity theft: Visit IdentityTheft.gov for recovery assistance. 

• Cybercrime: Report suspected internet-related identity theft to the FBI’s Internet Crime Complaint Center at IC3.gov. 

Reporting suspicious activity can help government agencies identify emerging scams and protect other taxpayers. 

How Is the IRS Fighting Tax Identity Theft and Refund Fraud? 

The IRS uses technology, taxpayer verification procedures, and partnerships with outside organizations to identify suspicious returns and prevent fraudulent refunds. These efforts are important because criminals continuously change their methods to bypass security systems. 

IRS Identity Theft Detection Filters 

The IRS uses automated identity theft filters and manual reviews to identify potentially fraudulent individual income tax returns. 

These filters evaluate characteristics associated with known identity theft schemes and suspicious filing patterns. When a return is selected, the IRS generally holds it until the agency can authenticate the filing. 

Depending on the circumstances, taxpayers may need to complete identity verification or respond to an IRS notice. However, these systems are not perfect. Legitimate returns can also be selected, delaying refunds and creating additional work for taxpayers. TIGTA’s 2026 audit highlights the challenge of balancing fraud prevention with the burden placed on legitimate taxpayers. 

The IRS Security Summit and Industry Partnerships 

The IRS Security Summit brings together the IRS, state tax agencies, and tax industry representatives to strengthen taxpayer protections and identify emerging fraud threats. Through partnerships such as the Information Sharing and Analysis Center, organizations share information about suspicious activity and developing scams. This collaboration helps identify fraudulent returns earlier and prevent refunds from reaching criminals. 

Common Tax Scams to Watch For 

Each year, the IRS publishes its Dirty Dozen list to highlight common tax scams targeting individuals, businesses, and tax professionals. 

Relevant threats include: 

• Phishing and smishing messages impersonating the IRS. 

• AI-enabled phone scams and voice impersonation. 

• Identity theft involving IRS Online Account access. 

• Misleading tax advice circulating on social media. 

• Ghost tax preparers who refuse to sign returns. 

• Spear-phishing and malware targeting tax professionals. 

• Fraudulent claims involving income and withholding information. 

The IRS encourages taxpayers to remain alert throughout the year because scammers do not limit their activity to filing season. 

How Optima Tax Relief Can Help Protect Your Tax Information 

Protecting personal information is an important part of managing tax matters, particularly for individuals concerned about identity theft and unauthorized access to their tax records. Optima Tax Relief offers Tax Shield, a service designed to help taxpayers monitor and protect their tax-related information. Features include 24/7 tax identity theft monitoring, alerts about potential threats, monthly IRS status reports, and IRS notice analysis to help members understand important tax communications. 

For individuals affected by tax-related identity theft, Tax Shield also offers restoration and protection support. Monitoring personal information and reviewing IRS account activity can help taxpayers recognize potential problems and take action. Learn more about Optima Tax Relief’s Tax Shield services at OptimaTaxShield.com. 

Frequently Asked Questions 

How common is tax identity theft in the United States? 

Tax identity theft remains a significant concern, with the IRS selecting approximately 7.5 million individual tax returns through identity theft filters during calendar years 2024 and 2025 (data through November 2025). However, these selections include legitimate returns requiring additional screening and are not all confirmed identity theft cases. 

Does the IRS notify you if someone steals your identity? 

The IRS may send a letter or notice when it suspects identity theft involving your tax return or account. However, taxpayers may discover the problem themselves when their legitimate return is rejected or they receive unfamiliar tax documents. 

Can someone steal my tax refund using my Social Security number? 

Yes. Criminals can use a stolen Social Security number and other personal information to file a fraudulent return and redirect the refund. An IRS Identity Protection PIN can help prevent someone else from filing a federal return using your taxpayer identification number. 

Tax Help for Victims of Tax Fraud 

IRS fraud and tax identity theft remain significant concerns, with billions of dollars in fraudulent refunds prevented in recent years. Although improved detection systems help identify suspicious returns, criminals continue using stolen personal information, phishing campaigns, and impersonation tactics to target taxpayers. 

Taxpayers can reduce their risk by protecting their Social Security numbers, filing returns promptly, obtaining an IRS Identity Protection PIN, and verifying unexpected IRS communications. Anyone who suspects their tax information has been compromised should report the issue promptly and follow the IRS’s recovery procedures. 

Staying informed about IRS fraud statistics and common tax scams can help taxpayers protect their personal information, avoid fraudulent filings, and respond effectively if identity theft occurs. Optima Tax Relief is the nation’s leading tax resolution firm with over $3 billion in resolved tax liabilities.      

If You Need Tax Help, Contact Us Today for a Free Consultation.