Tax Season Alert: Common Fraud Tactics Targeting Businesses

As tax season reaches its peak, businesses face not only filing obligations but also a heightened risk of fraud. Scammers know that finance teams are busy, deadlines are looming, and unusual requests may not immediately raise red flags. Each year, fraudulent schemes become more sophisticated, often impersonating trusted authorities, vendors, or even executives within your organization.

Below are some of the most common tax-season fraud tactics businesses should watch for — along with a reminder to mark upcoming tax deadlines on your calendar.

Common Tax-Season Fraud Tactics to Watch For

1. IRS Impersonation Scams
One of the most persistent schemes involves fraudsters posing as the IRS or state tax authorities. These messages may arrive via email, text message, or even phone calls, claiming there is a problem with your filing, a missed payment, or an urgent penalty that requires immediate action.

Red flags include:

• Threats of arrest, business closure, or license revocation
• Demands for payment via gift cards, wire transfers, or cryptocurrency
• Requests for sensitive information such as EINs or banking details

Remember: Legitimate tax authorities do not initiate contact via email or text to demand immediate payment.

2. Business Email Compromise (BEC)
During tax season, fraudsters often spoof email addresses of company executives, payroll staff, or accounting firms. These emails may request last-minute changes to payroll accounts, updated W-2 forms, or urgent tax-related wire transfers.

Prevention tips:

• Verify financial or data requests using a second channel (phone call or in-person confirmation)
• Train employees to check sender addresses carefully, not just display names
• Restrict who can authorize payment or data changes

BEC scams are particularly costly and remain one of the most financially damaging cybercrimes targeting businesses.

3. Fake Tax Preparers & Advisory Services
Scammers may advertise themselves as "tax experts" offering unusually low fees, guaranteed refunds, or aggressive tax-saving strategies. In reality, these operators may steal sensitive business information or file inaccurate returns that expose your company to audits and penalties.

Protect your business by:

• Verifying preparer credentials and PTIN numbers
• Avoiding preparers who won’t sign the return or provide copies
• Being cautious of promises that sound too good to be true

Your business remains liable for the accuracy of its return — even if a third party prepares it.

4. Phony Refund & Credit Scams
Fraudsters may contact businesses claiming eligibility for special refunds, credits, or pandemic-era incentives. These scams often request upfront "processing fees" or confidential tax information to "release" funds.

Legitimate tax credits are claimed directly on official filings — not through unsolicited outreach.

5. Malware & Phishing Disguised as Tax Documents
Emails with subject lines like "Urgent Tax Notice," "Updated Refund Schedule," or "Final Invoice" may contain malicious attachments or links. Once clicked, malware can compromise systems, steal credentials, or enable ransomware attacks.

Best practices include:

• Using strong spam filtering tools
• Training employees not to open unexpected attachments
• Hovering over links before clicking
• Keeping security software and systems updated

Important Tax Deadline Reminder
For many businesses, the federal income tax filing and payment deadline is April 15, or the next business day if the date falls on a weekend or holiday. While extensions may allow more time to file, they generally do not extend the time to pay taxes owed.

Be sure to confirm your specific filing requirements with your tax advisor or the IRS to ensure compliance.

Stay Vigilant This Tax Season
Tax season is stressful enough without the added risk of fraud. By staying informed, educating your team, and implementing verification controls, you can significantly reduce your exposure. A cautious, well-informed approach can protect not only your finances, but your company's reputation and long-term stability.

If something feels off, pause - and verify. Fraud prevention is always easier than fraud recovery.

If You Suspect Fraud, Act Immediately
If you believe your account information has been compromised or you notice suspicious activity, contact VeraBank right away so we can help protect your accounts and limit potential losses. Prompt reporting is one of the most effective ways to prevent fraud from escalating.

For additional tips, alerts, and best practices, we encourage you to visit the Fraud Prevention section of our website, where you’ll find resources designed to help your business stay informed and secure throughout the year.