Most Common Tax Relief Scams & How to Avoid Them
Tax debt “help” pitches are flooding phones and inboxes. Scammers exploit real IRS programs with fake guarantees and fees. Learn the red flags, how to protect your family, and what to do if you’re targeted.
Table of Contents
Quick Facts
About this scam type
Tax relief scams involve fraudsters impersonating IRS officials or exaggerating eligibility for legitimate IRS programs like the Offer in Compromise (OIC) or 'Fresh Start.' These schemes promise to resolve tax debt for a fraction of the amount owed, often demanding large upfront fees or stealing sensitive information. Many target people in financial distress, using urgency and official-sounding language to manipulate victims.
How scammers contact victims
Scammers use illegal robocalls and texts (smishing) to reach victims, claiming urgent IRS or tax relief updates. Email and online ads are also common. Phone-based tactics create pressure to respond immediately, while texts and emails link to fake sites designed to steal information. These channels are effective for their speed, automation, and ability to mimic real IRS messages.
Who is most at risk
People with back taxes, or those fearful of owing the IRS, are frequent targets. Older adults and small business owners facing financial stress are especially vulnerable, as they may be seeking urgent solutions. Scammers exploit financial anxiety and lack of familiarity with IRS procedures to coerce quick responses.
Understanding the risk level
Victims can lose thousands in fake fees, have their identities stolen, or file ineligible paperwork that worsens their IRS situation. Scams can lead to long-term credit problems, unauthorized tax filings, and exposure to further fraud. Acting quickly is critical if you’ve responded to such a scam.
Most Common IRS (Tax Relief) Scams
How it works: Automated calls claim you’re pre-selected for the IRS Fresh Start or a hardship program that can reduce or erase tax debt. The callers aim to harvest personal information and demand expensive upfront fees, often without properly assessing your eligibility. These messages typically spoof caller ID to appear local or governmental.
Robocall Example
You may qualify for the IRS Fresh Start program … reduce or eliminate your tax debt. Call today to speak with a case advisor. Robocall Example
Pre‑selected for the IRS Fresh Start—speak with a case advisor now. Red Flag Signs:
- • Guaranteed approval or blanket eligibility promises.
- • Urgent 'act today' language.
- • Upfront fee requests before an IRS transcript review.
- • Caller ID spoofed to show D.C. area or 'Tax Resolution Unit'.
How it works: Smishing texts pretend to be from the IRS or state tax agencies, suggesting you are owed a refund or eligible for relief. Texts prompt you to click a link that leads to a fake site to steal your personal or bank information.
Text Example
Update bank info to claim your payment: [shortened link] Red Flag Signs:
- • IRS or FTB does not text taxpayers about refunds or relief enrollment.
- • Texts using shortened or suspicious links.
- • Requests for your Social Security Number, photo ID, or bank logins via text.
How it works: For-profit marketers push guaranteed OIC settlements, advertising “pennies on the dollar” results for large upfront retainers. Most applicants won’t actually qualify, and some firms refuse to use the official IRS screening tools.
OIC Mill Ad Example
Settle for pennies on the dollar—new programs can wipe your debt clean. Guaranteed approval! Red Flag Signs:
- • 'We guarantee approval' without reviewing your finances.
- • Reluctance to use the free IRS OIC Pre-Qualifier tool.
- • No disclosure of credentialed staff (EA, CPA, or attorney).
How it works: Fraudsters offer to set up your IRS Online Account on your behalf. Instead, they steal your identity, create fraudulent tax returns, or access your tax data for further scams.
Scammer Message Example
We’ll set up your IRS account for relief approval—just send your photo ID and SSN. Red Flag Signs:
- • Anyone offering to create your IRS Online Account for you.
- • Requests for selfie/ID scans by email or text.
- • Requests for your login information or authentication codes.
Red Flags & Warning Signs
Top 5 Phrases Scammers Use
- 1 "Pre-approved for the IRS Fresh Start."
Real IRS programs do not randomly pre-approve taxpayers. This phrase creates a false sense of urgency and opportunity.
- 2 "Settle for pennies on the dollar—guaranteed."
No one can guarantee IRS settlement terms without a review. Guaranteed outcomes are a classic scam sign.
- 3 "Final notice—act today to avoid levy."
Pressure tactics and threats are used to prompt rash decisions. The IRS never threatens over the phone.
- 4 "New hardship program just launched."
‘Hardship’ programs are long-standing, not new. Scammers invent programs to trick consumers.
- 5 "We’re from the Tax Resolution Unit."
Real IRS employees use official titles and provide ID numbers, not vague department names.
Scam Warning Signs
- Unsolicited contact (calls/texts/emails) about tax relief.The IRS rarely initiates contact by phone and never by text or email about relief programs.
- Upfront fees before real IRS negotiations or review.Legitimate tax professionals will review your IRS records before discussing cost or outcomes.
- Requests for SSN/ID or bank data by text or email.Sensitive information should only be shared through secure, official channels.
- Non-.gov links or email addresses.Scammers use lookalike websites and emails that are not affiliated with the IRS.
- Pressure or discouragement to use IRS Pre-Qualifier tools.Anyone avoiding free IRS resources is likely not acting in your best interest.
Legitimate Communications
- IRS initiates contact by mail (with notice numbers, e.g., CP14/CP501/CP504).Official IRS correspondence about tax debt comes by U.S. mail, not text or cold call.
- Credentialed tax professionals disclose qualifications.Look for EA, CPA, or attorney credentials and a Preparer Tax Identification Number (PTIN).
- Written engagement terms and plan after IRS transcript review.A trustworthy professional will not promise outcomes before a full review of your tax record.
- Use of official IRS tools (OIC Pre-Qualifier, online account creation only by you).Legitimate advisors help you navigate, not avoid, official IRS resources.
- Clear discussion of options and full written fee details.Reputable firms avoid blanket guarantees and pressure tactics, providing written agreement and explanations.
How to Protect Yourself
Recognizing and avoiding tax relief scams is key to protecting your finances and personal information. These actionable steps can help keep you and your family safe, especially older relatives who might be targeted.
- 1. Never Engage With Unsolicited Calls, Texts, or Emails
If you receive a surprise contact about tax relief, hang up or delete the message. Do not click any links or provide information. Report phishing or smishing to phishing@irs.gov and forward scam texts to 7726 (SPAM).
The IRS will never ask for personal or financial information by text or unsolicited email.
- 2. Create Your Own IRS Online Account
Always set up your IRS Online Account yourself by going directly to IRS.gov. Never allow a third party to handle this for you, as it provides direct access to your tax and identity information.
- 3. Use the Free IRS OIC Pre-Qualifier Before Paying for Help
Before paying any firm, use the official IRS Offer in Compromise Pre-Qualifier tool to check if you may qualify and to better understand your options.
The tool is free and confidential – avoid firms that discourage its use.
- 4. Carefully Vet Any Tax Relief Firm
Check for credentials (EA, CPA, or tax attorney) and a Preparer Tax Identification Number (PTIN). Demand written engagement terms and a review of your official IRS transcript before paying fees. Never accept outcome guarantees.
You can verify credentials through state accountancy boards or the IRS preparer directory.
- 5. Treat 'Fresh Start' Guarantees and Big Upfront Fees as Warning Signs
Guaranteed results and high upfront fees are major red flags. Only engage firms that explain fees clearly, avoid pressure, and use official IRS tools.
The Telemarketing Sales Rule generally prohibits advance fees for debt relief via telemarketing.
- 6. Block and Report Robocalls
Use your carrier’s or device’s call-blocking features, or a third‑party tool, to stop repeated tax relief robocalls. Report suspicious calls to your state Attorney General and the FTC.
- 7. Set Senior Family Rules
Make it a family rule for older relatives: 'Never give information or pay after a surprise call or text. Always verify by directly calling the IRS or a known tax professional.'
- 8. Contact the IRS Directly for Tax Relief Options
If you truly owe taxes, call the IRS yourself at 800‑829‑1040 or log in to your own IRS Online Account. Record details of every call or step you take.
What to Do If You're a Victim
If you think you’ve given information or money to a tax relief scammer, act quickly to limit the damage. The faster you respond, the more protection you’ll have against identity theft or further financial loss.
- 1. Freeze Your Credit and Add Fraud Alerts (Do immediately)
If you gave out your SSN, date of birth, or ID, freeze your credit with Equifax, Experian, and TransUnion right away. Add a fraud alert to help prevent new accounts being opened in your name.
- 2. Change Passwords and Enable Multi-Factor Authentication (Do immediately)
If you shared any login or financial info, change your email, IRS, and banking passwords immediately. Enable two-step verification on all accounts where possible.
- 3. Dispute Payments With Your Bank or Card Issuer (Do immediately)
If you paid, contact your bank or credit card immediately to dispute or recall the charge. Revoke any automatic payment authorizations (ACH) you gave the scammer.
- 4. Revoke Problematic IRS Authorizations (Do immediately)
If you signed IRS Form 2848 (POA) or 8821 (TIA) with a suspicious firm, revoke it by filing a new form marked REVOKE. Then check your IRS transcripts via your official online account.
- 5. Report the Scam to Authorities (Within 24 hours)
Within 24 hours, report IRS impersonation to TIGTA and phishing to phishing@irs.gov. Email or text scams go to the FTC at reportfraud.ftc.gov, and monetary/ID theft is reported to the FBI IC3. Notify your state Attorney General as well.
- 6. Monitor Your IRS Account and Consider IP PIN (Within 1 week)
Keep an eye on your IRS account for signs of fraud or unauthorized activity. Apply for an IRS Identity Protection PIN to stop criminals from filing in your name.
- 7. Document Everything and Seek Help if Needed (Within 1 week)
Save screenshots, call logs, and contracts. If a contract was abusive, complain to your state accountancy board, IRS Office of Professional Responsibility (for EAs/attorneys), or your state Attorney General.
For official guidance and reporting links:
Frequently Asked Questions
'Fresh Start' refers to IRS policy changes over the years, not a guaranteed program. Scammers misuse the term to promise forgiveness. Always verify using IRS.gov or official IRS tools.
The IRS typically uses U.S. mail with official notice numbers (like CP14 or CP504). They do not contact taxpayers by text, social media, or surprise calls about refunds or relief.
OIC is a legitimate IRS option for those who qualify. However, many companies ('mills') charge steep fees for outcomes most people won’t get. Use the free IRS Pre-Qualifier tool and look for credentialed help.
Don’t click the link. Instead, forward the text to 7726 (SPAM) and email it to phishing@irs.gov, then delete it. If you clicked, change your passwords and monitor your financial accounts.
Act fast: dispute the charge through your bank or card, keep all records, and report to the FTC and your state Attorney General. Deceptive practices may be actionable under federal law.
Call the IRS directly or log in to your official IRS Online Account. Explore installment agreements, hardship status, or OIC with credentialed, reputable help.
No. Only you should create and access your IRS Online Account, using the official IRS.gov website. Never share your credentials or documents with a third party.