Scammers are always looking at ways to separate you from your money and they are using the tax season to try and trick taxpayers into falling for various fraud schemes.

With millions of Americans sharing personal and financial information, tax season is a prime time for scammers to steal not just your refund but also your identity, experts say.

“Anybody can be a victim,” said Jennifer Hessing, who works as a fraud analytics director at Wells Fargo.

Hessing said she experienced having someone file a tax return in her name with stolen personal information. The Internal Revenue Service caught the fraudulent filing, and Hessing now has established an identity protection PIN with the IRS. 

Individuals can also proactively request an IP PIN through the IRS. Your spouse and dependents are also eligible for an IP PIN if once they go through a verification process.

“Don’t wait to become a victim to receive this,” Hessing said.  

Underscoring the growing sophistication of scams targeting taxpayers, Americans lost $9.1 billion in fraud from tax and financial crimes in 2024, according to the IRS.

“It’s not a fringe issue anymore, said Steve Grobman, chief technology officer at McAfee, a cybersecurity company. Nearly one in four Americans, 23%, have been impacted by a tax scam at some point, according to a recent McAfee survey.

“They [scammers] are creating narratives that sound plausible, such as, if you pay your taxes with cryptocurrency, you can extend the deadline or have a discount,” Grobman said. (Neither claim is correct. Plus, the IRS does not allow you to pay your federal tax bill with crypto, although some states will allow it.)

Unlike credit cards and bank transactions, there’s a lack of safeguards to paying with digital currency. The IRS treats crypto as property for tax purposes and does not accept it as payment.

“If you pay somebody with cryptocurrency more often than not, the money is gone,” Grobman said.

If you think you’ve been scammed, had your information stolen or suspect someone is committing tax fraud, report it to government authorities. The IRS says if your Social Security number or individual tax identification number was stolen, immediately report it to the Federal Trade Commission at IdentityTheft.gov, and to the IRS.

If you’ve been scammed and someone used your information to file a tax return, get a copy of the return and submit an Identity Theft Affidavit form online or mail it to the IRS.

If your tax preparer filed a fraudulent return, submit a mail Return Preparer Complaint form to inform the IRS.

You can also find information on scams that target veterans, service members and their families or caregivers at VSAFE.

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The odds of a U.S. recession have risen amid an escalating trade war. But most investors should ignore the impulse to flee for safety by exiting the market, financial experts say.

Instead, the best way to brace for an economic shock is by double-checking fundamentals like asset allocation and diversification, they said.

“You’re looking for balance rather than casting your lot with any one economic outcome,” said Christine Benz, director of personal finance and retirement planning for Morningstar.

The probability of an economic downturn rose to 36% in March from 23% in January, according to fund managers, strategists and analysts polled for a recent CNBC Fed Survey. A recent Deutsche Bank survey pegged the odds at almost 50-50.

President Donald Trump hasn’t ruled out the possibility of a U.S. recession and earlier this month said the economy was in a “period of transition.”

Recession isn’t assured, though, and economists generally agree the chances are relatively low.

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When the economy heads toward a recession, it’s natural for investors to worry about falling stock prices and the impact on their portfolio. But investors quite often make bad moves and guess poorly, experts say.

Emotional behavior — selling stocks during market downturns and missing the rebounds — is a big reason investors underperform the broad market, experts said.

The average stock investor earned 5.5 percentage points less than the S&P 500 in 2023, for example, according to DALBAR, which conducts an annual investor behavior study. Investors earned about 21% while the S&P 500 returned about 26%, DALBAR said.

The story was similar in 2022: Investors lost 21% while the S&P 500 declined 18%, it found.

Stocks have always recovered after bottoming out during recessions, Fitzgerald said. Missing those rebounds can be costly, he said.

“I’d definitely urge people to tap on the brakes before making big shifts in anticipation of some market outcome,” Benz said.

Retirees who rely on their investments for income should avoid withdrawing from stocks if they’re declining during a recession, advisors said. Doing so, especially within the first five or so years of retirement, raises the odds that a retiree will deplete their portfolio and outlive their savings, research shows. (This is called “sequence of returns” risk.)

Retirees who don’t have a bucket of bonds and cash from which to pull during such times may benefit from preparing while the economy is still strong, Benz said.

“If you have a portfolio constructed well enough, [a recession] will be uncomfortable and the waves will toss [the ship] around a little bit, but the ship isn’t going to sink,” Fitzgerald said.

There has been a change to inherited individual retirement account rules which mandates that certain heirs must take required withdrawals each year or face an IRS penalty.

Starting in 2025, certain beneficiaries must take annual required minimum distributions while depleting inherited IRAs over 10 years, according to final regulations released in July.

The “10-year rule” and RMD requirement applies to most non-spouse heirs — commonly, adult children — if the original IRA owner reached RMD age before their death.

Meanwhile, the average investor doesn’t know a great deal about these guidelines, said certified financial planner and enrolled agent Catherine Valega, founder of Green Bee Advisory in the Boston area.

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Despite the change, beneficiaries should weigh strategic IRA withdrawals, depending on tax brackets each year, which could mean emptying accounts sooner, experts say.

Here’s what to know about the change for inherited IRAs.

Before the Secure Act of 2019, IRA heirs could “stretch” inherited account withdrawals over their lifetime, which reduced yearly taxes.

Since 2020, the 10-year rule has applied to heirs who are not a spouse, minor child, disabled, chronically ill or certain trusts. However, until the IRS issued its regulations last year, it’s been unclear whether yearly RMDs were required during the 10-year drawdown.

If the original owner reached RMD age before death, beneficiaries also must take RMDs, Appleby said.

Previously, the IRS waived penalties for missed RMDs on inherited IRAs. But if you don’t start yearly RMDs in 2025, you could be subject to a 25% penalty on the amount you should have withdrawn. 

The IRS could reduce the fee to 10% if you withdraw the proper amount within two years and file Form 5329. In some cases, the agency will waive the penalty entirely.  

“A lot of clients are getting that excise tax waived” by correcting the RMD, filling out the form and providing a “reasonable explanation,” Appleby said.