With tax season underway, Frost Law warned people and businesses across the nation to protect themselves against a surge of scams and schemes.
Taxpayers are already seeing tax-themed threats emerge this filing season. Frost Law, headquartered in the Washington, D.C., metropolitan area, urged people to be on the lookout for five particularly dangerous things as the April 15 tax deadline approaches. These include misleading social media tax advice, romance scams, phishing emails, crypto-based “pig butchering” schemes and “new client” scams aimed at tax professionals and businesses.
“Scam artists are relentless, and they use tax season as cover to trick hard-working taxpayers,” said Glen Frost, the firm’s Founder and Managing Partner. “People can’t hear these warnings enough. The tax season threats being seen are incredibly complex and sophisticated, and scammers often use advanced manipulation techniques to convince people to part with their money or lose their tax refunds.”
The Frost Law team includes people familiar with these scams and techniques, including attorneys who have worked directly on these cases. Frost attorneys have helped dozens of scam victims navigate complex tax rules on issues like theft loss deductions. In addition, Frost Public Relations Director Terry Lemons worked closely on scam threats while at the Internal Revenue Service, where he created the agency’s Dirty Dozen tax scams list.
Frost Law reminds taxpayers to look for official federal government warnings on these schemes from places like the IRS, the Federal Trade Commission as well as local law-enforcement agencies, state departments of revenue and attorneys general.
For victims of scams with financial and tax implications, Frost’s team is available to help.
Here are five scams the Frost team reminds taxpayers to watch out for:
This is a huge emerging threat for taxpayers, particularly with this filing season seeing a variety of important tax law changes from the One Big Beautiful Bill Act. Online influencers looking to gain followers and clicks routinely offer up dubious tax advice, including misinterpreting the rules on complex new guidelines on things like taxing worker overtime. Others incorrectly suggest people can shift their income into tips to take advantage of the “no tax on tips” provision. And some on social media tout mythical ways for people to “untax” themselves, repeating long-disproven theories.
“Bad social media advice goes viral instantly, and it’s a real threat to well-meaning taxpayers,” said Alyssa Maloof Whatley, a Frost director and attorney who works to dispel tax myths on TikTok and other social media platforms. “Influencers are trying to cash in on these schemes. But the only ones making money on these are the people posting inaccurate information. The well-intentioned taxpayers who follow this misleading advice put themselves at risk of being victims – and facing IRS action down the road.”
The Frost team urges taxpayers to seek out advice from a reputable, accredited tax professional that can recognize and understand the specific facts and circumstances affecting a person’s financial situation – something that cookie-cutter social media advice can’t address.
This remains one of the most common threats facing people at tax time. Fraudsters use email, text and social media schemes to try getting people to click links or download malware. These schemes adjust according to the calendar. With millions filing at tax time, scammers will pour out messages related to tax refund updates or urging taxpayers that more information is needed to process their tax return. On the surface, these messages can appear to be from the IRS, a financial institution, a tax software company or other legitimate sources.
But a closer look at things like the email address and the underlying message will show tell-tale signs the sender isn’t who they portray to be.
“It’s always a good idea to be careful with clicking links or downloading attachments that arrive on email. But during filing season, people need to use extra caution involving any unexpected tax communications,” Lemons said. “Scammers are sophisticated chameleons who understand the environment and camouflage their emails to look legitimate – and at the very time when people are desperately looking for information about their tax refunds.”
Tip: Taxpayers can report email scams to the IRS; the agency has special information to help.
Taxpayers who are victims are these schemes may also face potential tax issues. Heather Posey, a Frost attorney who has worked with dozens of scam victims, noted these losses may be deductible when phishing scammers gain access to investment assets.
In these, scammers engage in an elaborate set of communications to build trust with victims by calling or engaging online. The messages can be spread over several weeks and frequently involve the scammer – called the “butcher” -- advertising an investment opportunity in cryptocurrency, gold or another commodity with a lure of large profits.
In an initial stage, the victim follows the scammer’s directions and transfers a small amount of money to a fake investment platform, making profits in the deal, which the victim is able to withdraw. This stage builds trust and “fattens” the victim.
Posey said the next step typically involves the scammers promising even bigger investment returns and encouraging more substantial deposits. The victims then tap into larger funds – perhaps from Individual Retirement Accounts or other investment vehicles. Once the deposits are sent to the fake investment account, the platform’s “customer service” will not allow the victim to make further withdrawals without paying a “tax,” “withdrawal fee” or “penalty.” Even if the victim sends these payments, the account will remain locked, disabled or will otherwise not allow a withdrawal and the scammers disappear with the funds – the final act of butchering the “pig,” or victim.
“To add insult to injury, the victim can be left with a tax bill when they withdraw money from taxable accounts,” Posey said. “Many victims don’t realize there’s a tax implication, or that there are ways of deducting their losses on the tax return.”
In this variant, romance scams target lonely hearts. The messages can come from a variety of places, through email or online dating apps. These scams can take time to develop as the scammer builds trust and connection with the lovelorn victim and a “romance” blooms, said Zoha Sohail, a Frost attorney.
Eventually, the online scammer has a financial request of the victim, perhaps asking for money to travel to meet in-person or claiming an international relative urgently needs medical care. The love-smitten victim withdraws money and sends the money internationally or through a crypto platform. The money and the lover quickly disappear.
In this situation, Sohail noted the tax implications are worse for the victim. If the money was withdrawn from a taxable account, the victim is liable for the taxes because there was no investment motive – just an act of personal generosity.
“This ends up being a heart-breaking situation for the victim in many ways, personally and financially,” Sohail said.
This is another scam that peaks around tax time for tax professionals. With filing season in full swing, scammers use this time of year to target tax pros under the guise of asking for help filing a return.
During email exchanges, the scammer will include a malicious link or attachment that pretends to be information needed for the tax return. When the tax pro clicks the link or opens the attachment, that’s the start of the trouble. The scammer can gain access to the preparer's email address, password and potentially more information. Malware loaded onto the client’s computer can help scammers gain access to the firm’s system – and valuable client data. Scammers also sometimes then use the guise of the tax firm to contact clients – and in turn steal their sensitive information.
Variations of this scheme also target large and small businesses, where scammers can pretend to be from the company human resources department or executives hoping to grab sensitive information from unsuspecting firm employees.
“Tax professionals and businesses have a treasure trove of information that scammers would love to reach,” Lemons said. “It’s critical that firms – regardless of size – stay on guard. Educating employees across your business about these risks is a critical defense to protect against these deceptive scams."
About Frost Law: The firm is headquartered in the Washington, D.C., metro area. With multiple offices, the firm works with clients across the nation and around the world. Currently, more than 80 Frost employees include skilled attorneys focusing on tax, business, litigation and estates as well as Certified Public Accountants, Certified Financial Planners™, Enrolled Agents and other tax professionals. Frost’s team can help people and businesses on issues including tax planning, tax strategy, tax minimization as well as helping scam victims with tax issues.
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With tax season underway, Frost Law warned people and businesses across the nation to protect themselves against a surge of scams and schemes.
Taxpayers are already seeing tax-themed threats emerge this filing season. Frost Law, headquartered in the Washington, D.C., metropolitan area, urged people to be on the lookout for five particularly dangerous things as the April 15 tax deadline approaches. These include misleading social media tax advice, romance scams, phishing emails, crypto-based “pig butchering” schemes and “new client” scams aimed at tax professionals and businesses.
“Scam artists are relentless, and they use tax season as cover to trick hard-working taxpayers,” said Glen Frost, the firm’s Founder and Managing Partner. “People can’t hear these warnings enough. The tax season threats being seen are incredibly complex and sophisticated, and scammers often use advanced manipulation techniques to convince people to part with their money or lose their tax refunds.”
The Frost Law team includes people familiar with these scams and techniques, including attorneys who have worked directly on these cases. Frost attorneys have helped dozens of scam victims navigate complex tax rules on issues like theft loss deductions. In addition, Frost Public Relations Director Terry Lemons worked closely on scam threats while at the Internal Revenue Service, where he created the agency’s Dirty Dozen tax scams list.
Frost Law reminds taxpayers to look for official federal government warnings on these schemes from places like the IRS, the Federal Trade Commission as well as local law-enforcement agencies, state departments of revenue and attorneys general.
For victims of scams with financial and tax implications, Frost’s team is available to help.
Here are five scams the Frost team reminds taxpayers to watch out for:
This is a huge emerging threat for taxpayers, particularly with this filing season seeing a variety of important tax law changes from the One Big Beautiful Bill Act. Online influencers looking to gain followers and clicks routinely offer up dubious tax advice, including misinterpreting the rules on complex new guidelines on things like taxing worker overtime. Others incorrectly suggest people can shift their income into tips to take advantage of the “no tax on tips” provision. And some on social media tout mythical ways for people to “untax” themselves, repeating long-disproven theories.
“Bad social media advice goes viral instantly, and it’s a real threat to well-meaning taxpayers,” said Alyssa Maloof Whatley, a Frost director and attorney who works to dispel tax myths on TikTok and other social media platforms. “Influencers are trying to cash in on these schemes. But the only ones making money on these are the people posting inaccurate information. The well-intentioned taxpayers who follow this misleading advice put themselves at risk of being victims – and facing IRS action down the road.”
The Frost team urges taxpayers to seek out advice from a reputable, accredited tax professional that can recognize and understand the specific facts and circumstances affecting a person’s financial situation – something that cookie-cutter social media advice can’t address.
This remains one of the most common threats facing people at tax time. Fraudsters use email, text and social media schemes to try getting people to click links or download malware. These schemes adjust according to the calendar. With millions filing at tax time, scammers will pour out messages related to tax refund updates or urging taxpayers that more information is needed to process their tax return. On the surface, these messages can appear to be from the IRS, a financial institution, a tax software company or other legitimate sources.
But a closer look at things like the email address and the underlying message will show tell-tale signs the sender isn’t who they portray to be.
“It’s always a good idea to be careful with clicking links or downloading attachments that arrive on email. But during filing season, people need to use extra caution involving any unexpected tax communications,” Lemons said. “Scammers are sophisticated chameleons who understand the environment and camouflage their emails to look legitimate – and at the very time when people are desperately looking for information about their tax refunds.”
Tip: Taxpayers can report email scams to the IRS; the agency has special information to help.
Taxpayers who are victims are these schemes may also face potential tax issues. Heather Posey, a Frost attorney who has worked with dozens of scam victims, noted these losses may be deductible when phishing scammers gain access to investment assets.
In these, scammers engage in an elaborate set of communications to build trust with victims by calling or engaging online. The messages can be spread over several weeks and frequently involve the scammer – called the “butcher” -- advertising an investment opportunity in cryptocurrency, gold or another commodity with a lure of large profits.
In an initial stage, the victim follows the scammer’s directions and transfers a small amount of money to a fake investment platform, making profits in the deal, which the victim is able to withdraw. This stage builds trust and “fattens” the victim.
Posey said the next step typically involves the scammers promising even bigger investment returns and encouraging more substantial deposits. The victims then tap into larger funds – perhaps from Individual Retirement Accounts or other investment vehicles. Once the deposits are sent to the fake investment account, the platform’s “customer service” will not allow the victim to make further withdrawals without paying a “tax,” “withdrawal fee” or “penalty.” Even if the victim sends these payments, the account will remain locked, disabled or will otherwise not allow a withdrawal and the scammers disappear with the funds – the final act of butchering the “pig,” or victim.
“To add insult to injury, the victim can be left with a tax bill when they withdraw money from taxable accounts,” Posey said. “Many victims don’t realize there’s a tax implication, or that there are ways of deducting their losses on the tax return.”
In this variant, romance scams target lonely hearts. The messages can come from a variety of places, through email or online dating apps. These scams can take time to develop as the scammer builds trust and connection with the lovelorn victim and a “romance” blooms, said Zoha Sohail, a Frost attorney.
Eventually, the online scammer has a financial request of the victim, perhaps asking for money to travel to meet in-person or claiming an international relative urgently needs medical care. The love-smitten victim withdraws money and sends the money internationally or through a crypto platform. The money and the lover quickly disappear.
In this situation, Sohail noted the tax implications are worse for the victim. If the money was withdrawn from a taxable account, the victim is liable for the taxes because there was no investment motive – just an act of personal generosity.
“This ends up being a heart-breaking situation for the victim in many ways, personally and financially,” Sohail said.
This is another scam that peaks around tax time for tax professionals. With filing season in full swing, scammers use this time of year to target tax pros under the guise of asking for help filing a return.
During email exchanges, the scammer will include a malicious link or attachment that pretends to be information needed for the tax return. When the tax pro clicks the link or opens the attachment, that’s the start of the trouble. The scammer can gain access to the preparer's email address, password and potentially more information. Malware loaded onto the client’s computer can help scammers gain access to the firm’s system – and valuable client data. Scammers also sometimes then use the guise of the tax firm to contact clients – and in turn steal their sensitive information.
Variations of this scheme also target large and small businesses, where scammers can pretend to be from the company human resources department or executives hoping to grab sensitive information from unsuspecting firm employees.
“Tax professionals and businesses have a treasure trove of information that scammers would love to reach,” Lemons said. “It’s critical that firms – regardless of size – stay on guard. Educating employees across your business about these risks is a critical defense to protect against these deceptive scams."
About Frost Law: The firm is headquartered in the Washington, D.C., metro area. With multiple offices, the firm works with clients across the nation and around the world. Currently, more than 80 Frost employees include skilled attorneys focusing on tax, business, litigation and estates as well as Certified Public Accountants, Certified Financial Planners™, Enrolled Agents and other tax professionals. Frost’s team can help people and businesses on issues including tax planning, tax strategy, tax minimization as well as helping scam victims with tax issues.
