A survey from Allstate Identity Protection reveals that nearly two-thirds of Americans (64%) are worried that cybercriminals could use their personal information to pocket their tax refund.
Tax-related identity theft is an ongoing issue, with Allstate reporting that 40% of claims filed through its identity protection insurance division occur during tax season.
Victims of tax identity theft can wait up to two years to get their rightful refund, according to the National Taxpayer Advocate.
Identity theft protection is your first line of defense
In 2024, the IRS received nearly 300,000 reports of identity theft, responsible for an estimated $5.5 billion in tax fraud. This year is something of a perfect storm: With thousands of IRS employees expected to lose their jobs due to ongoing cuts in the federal government, confidence in the agency’s ability to fight fraud has diminished.
According to Allstate, 20% of those surveyed say they’re more worried about tax-related identity theft this year than in the past.
Taxpayers who choose to receive a paper check in the mail, who represent about one in eight filers, are at increased risk. In 2023, the U.S. Post Office's Office of the Inspector General reported that more than $500,000 worth of refund checks went undelivered in suburban Philadelphia after a network of criminals stole residents' identities and filed more than 3,300 fraudulent returns.
The ringleaders bribed postal carriers to steal the refund checks from the mail and gave accomplices phony identification to use at check-cashing places.
The scheme ultimately defrauded the U.S. Treasury of more than $10 million.
Offers in this section are from affiliate partners and selected based on a combination of engagement, product relevance, compensation, and consistent availability.
The Deluxe plan comes with priority support and live chat, while the paid Pro Support tier adds access to a tax pro, phone support, live screenshare and assistance with federal and state returns
Guarantees 100% accuracy and maximum refund
TaxAct Xpert Assist is available starting at $45
100% accuracy and maximum refund
Terms apply
Allstate says the best way to protect yourself from tax fraud is to file early and online and to get an IRS Identity Protection PIN.
There are some other best practices to help you steer clear of tax fraud, according to cybersecurity expert Michael Scheumack. One is to avoid engaging with unsolicited emails, calls or texts.
"Government agencies don't reach out to you out of the blue over the phone or text," Scheumack told CNBC Select previously. "Generally, you have to initiate communication with them. If somebody's calling you and asking you for that information, that's already a bad sign."
Identity theft protection and credit monitoring services can also track your Social Security number, banking information and other personal details and alert you if they've been used without your knowledge.
Offers in this section are from affiliate partners and selected based on a combination of engagement, product relevance, compensation, and consistent availability.
Plans from $10 to $32 per month, billed annually
Protects against identity theft, fraud, spam calls and websites, viruses and malware. Offers three-credit-bureau monitoring, VPN, dark web monitoring, password manager, email aliases and instant credit lock.
On Aura's site
From $7.50 to $25.00 per month, billed annually on individual plans and $12.50 to $33.33 per month, billed annually on family plans
Up to $1 million in insurance for eligible losses from identity theft
On Identity Guard's site
If you believe a tax scammer has contacted you, the IRS recommends cutting off contact immediately and reporting the incident to the Treasury Inspector General for Tax Administration.
You can also report fraudulent calls to the Federal Trade Commission and send the number and any other details to phishing@irs.gov, with the subject line "IRS Phone Scam."
Tax scam FAQs
What are some signs I'm the victim of a tax scam?
If you are contacted by someone claiming to be from the IRS and asking for your credit or debit card numbers over the phone or via social media, it is likely a tax scam. IRS agents will never threaten to call the police or immigration officials. The agency will also never leave pre-recorded robocalls or mail advertisements for tax debt resolution services.
How much is the average tax refund?
As of March 7, 2025, the IRS has returned $145 billion, a 7.2% increase from the same time in 2024. The average individual refund was $3,324, up from $3,145 in 2024.
For filers who opted for direct deposits, the average return in 2025 is $3,379, about 5.3% more than the $3,209 average in 2024.
How long does it take to get a tax refund?
If you filed online and set up direct deposit, the IRS says you can expect a refund within 21 days. If you mailed a printed return or expect a physical check in the mail, it could take up to eight weeks.
Money matters — so make the most of it. Get expert tips, strategies, news and everything else you need to maximize your money, right to your inbox. Sign up here.
Meet our experts
At CNBC Select, we work with experts with specialized knowledge and authority based on relevant training and/or experience. For this story, we interviewed Michael Scheumack, chief innovation officer at IdentityIQ, an identity theft monitoring platform.
Why trust CNBC Select?
At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every tax article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of tax products. To research the best insurance companies, we compiled over 100 data points on more than a dozen insurance companies. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.
Catch up on CNBC Select's in-depth coverage of credit cards, banking and money, and follow us on TikTok, Facebook, Instagram and Twitter to stay up to date.
