Key Findings from the Study
- Tax scams resulted in $5,742,463.91 in reported financial losses (2025 YTD).
- Monthly tax scam reports rose 62% year-over-year, from 227 in 2024 to 368 in 2025.
- The average number of monthly tax scam reports has increased by 323% since 2020.
- Only 12.9% of tax scam reports involved financial losses, but the average loss per victim reached $32,080.
- Texas reported the highest total losses: $2.1 million across 15 successful scams.
- Massachusetts had the highest average loss per case: $240,000.
- California had the most scam reports overall: 175 total cases with 30 resulting in financial losses.
Tax-related fraud has become a growing concern in recent years, with reports increasing dramatically since 2020.
An exclusive new study by The Kaplan Group reveals that Americans lost more than $5.7 million to tax-related scams in the first few months of 2025 alone.
The Kaplan Group analyzed 1,384 scam reports submitted to the Better Business Bureau (BBB) Scam Tracker in 2025. Reports were filtered to include only those classified under “tax collection” and were further processed to identify confirmed financial losses and geographic trends. The resulting analysis highlights which states face the greatest risk, where losses are most severe, and how scam tactics are evolving.
We saw multiple scams where individuals were told they owed back taxes and had to pay immediately—sometimes via gift cards or wire transfers. For example, this report from Texas:
“Caller [impersonated] an official IRS person, demanding $750 to pay off owed taxes.”
If someone calls claiming to be from the IRS and demands instant payment, hang up. Always confirm IRS communications at IRS.gov.
Are Tax Scams Becoming More Common?
Tax scam reports followed a relatively steady trend from 2020 to 2022, with monthly reports ranging from 87 to 99. Beginning in 2023, the number of cases surged—rising 81% year-over-year to an average of 161 per month.
That growth continued into 2024 with a 41% increase, reaching 227 per month, and then spiked another 62% in 2025 to a record-high 368 monthly cases. Overall, the average number of monthly tax scam reports has increased by 323% since 2020, based on data through May 8.
Monthly tax scam reports (average):
- 2020: 87/month
- 2021: 99/month (+13.6%)
- 2022: 89/month (−10.5%)
- 2023: 161/month (+81.0%)
- 2024: 227/month (+41.1%)
- 2025 (YTD): 368/month (+62.0%)
The number of reports has more than quadrupled since 2020, reflecting a dramatic increase in scam activity.
What Was The Total Financial Impact of Reported Tax Scams?
Although the majority of tax scam reports in 2025 did not result in confirmed financial losses, those that did were significant in scale. Just 179 successful scams accounted for over $5.7 million in losses nationwide, underscoring the financial risk posed by even a small percentage of effective fraud attempts.
Overall figures:
- Total number of unique cases: 1,384
- Cases with financial losses: 179
- Total financial losses from tax scams: $5,742,463.91
- Average loss per successful scam: $32,080.80
Which States Are Losing the Most to Tax Scams?
Some states are experiencing far greater financial losses than their share of scam reports would suggest. Texas, ranked #1 in total losses, made up only 9.3% of scam reports but accounted for 36.5% of all financial losses, totaling over $2.1 million. Massachusetts, ranked #3 in total losses, contributed just 1.7% of reports yet was responsible for 12.5% of nationwide losses, due to the highest average loss per case at $240,000. These imbalances indicate that scammers are concentrating high-dollar efforts in specific states rather than spreading attacks evenly across the country.
Many scams in our dataset involved people impersonating legitimate tax services or representatives from tax relief programs. For example, this report from South Carolina:
“I received a call and voicemail from a ‘Shane Richardson’ with ‘Your Back Tax Filings, LLC’ regarding back taxes due by the end of this month. The lady called from [Number Removed] and asked for me to call [Number Removed] back immediately to avoid garnishment of my wages.”
If someone offers unsolicited help with your taxes over the phone or text, treat it as a red flag and verify through official IRS channels.
Which States Face the Highest Risk?
The Kaplan Group developed a composite Risk Score to identify which states are most vulnerable to tax scams in 2025. The score combines five metrics—total loss, number of successful scams, average loss per case, report volume, and per capita loss—into a single ranking.
Texas ranked #1 with the highest overall risk, driven by $2.1 million in losses from just 15 successful scams. California, ranked #2, had the most reports overall and accounted for 17.3% of total losses. Massachusetts came in at #3, despite having only 24 total reports, due to an exceptionally high average loss of $240,000 per incident. These states represent the highest concentrations of scam risk and financial exposure in the country.
Where Were Tax Scams Most Concentrated?
While total case volume is one indicator of risk, analyzing how losses are distributed across states reveals where scams are inflicting the most financial harm relative to overall activity.
Texas, ranked #1 in reported scam losses, accounted for 36.5% of all losses but just 9.3% of total cases. Massachusetts, ranked #3, made up only 1.7% of cases but 12.5% of losses, driven by an average loss of $240,000 per scam.
| Rank | State | % of Total Losses | % of Total Cases | % of Cases with Loss |
| 1 | Texas | 36.5% | 9.32% | 8.38% |
| 2 | California | 17.31% | 12.64% | 16.76% |
| 3 | Massachusetts | 12.54% | 1.73% | 1.68% |
| 4 | Florida | 7.06% | 5.92% | 5.03% |
| 5 | Ohio | 5.44% | 2.17% | 3.91% |
| 6 | New York | 0.91% | 3.61% | 6.7% |
| 7 | West Virginia | 2.46% | 0.51% | 0.56% |
| 8 | North Carolina | 2.68% | 4.05% | 2.79% |
| 9 | Georgia | 1.89% | 2.53% | 3.91% |
| 10 | Arizona | 0.8% | 4.7% | 3.91% |
What Forces Are Driving the Rise in Tax Scams?
The surge in tax scams from 2023 to 2025 reflects a convergence of macroeconomic instability, evolving technology, and systemic vulnerabilities in how Americans interact with tax systems.
- Post-Pandemic Economic Strain: The combination of inflation, rising cost of living, and reduced pandemic-era tax benefits has left many households in more precarious financial positions. Scam operators are exploiting these pressures, such as by posing as IRS agents demanding repayment or offering false refunds.
- Shift Toward Digital Tax Filing: The ubiquity of digital tax preparation software and online refund programs has created new fraud entry points. Scammers use phishing emails that mimic these platforms to collect sensitive information or redirect refund deposits.
- Regional Targeting for High Payouts: In Texas, 15 successful scams produced over $2.1 million in losses. In Massachusetts, the average loss per case reached $240,000. These figures indicate scammers are strategically focusing efforts on states with either larger refunds or lower consumer protections.
We’re not just seeing more scams—we’re seeing more personalized ones. For example, this report from Ohio:
“[I] got a call from Denise Whitman [saying] that they work with document dispatch service and had some questions regarding [myself] as well as the property located off of (they knew my street name) and that it was very urgent that [I contact] the issuing office immediately at [Number Removed] and when calling, [to] please reference the case number 54181. Any failure to contact back will leave no choice but to forward this matter to [my] local jurisdiction”
If someone uses partial personal details to pressure you into calling back, it’s a tactic—not a legitimate notice. Always confirm through official tax channels before responding.
Between the Lines
This study suggests that tax scam risk isn’t just about how frequently scams occur—but how significant the financial consequences are when they succeed. The data shows that while only 12.9% of reported scams led to confirmed losses, the average payout exceeded $32,000 per victim.
In particular, scams are thriving in environments where trust, timing, and digital interactions converge. The compressed timeline of tax season, combined with increased reliance on digital platforms, has created systemic vulnerabilities. Consumers may receive urgent, convincing communications from what appear to be government agencies—only to realize too late that they’ve been defrauded.
Critics may point out that most tax scams don’t result in a financial hit—and that’s true. But those that do can result in life-altering losses, wiping out refunds or draining savings during a critical financial period.
These scams work because they feel urgent and familiar. The moment you feel rushed or singled out—especially by someone claiming authority—it’s likely part of a script designed to manipulate you. Slow down, and remember: you’re not obligated to respond immediately to anyone.
What’s Next
Closing the gap between rising fraud activity and consumer protection will require stronger systems at both the institutional and individual level. That includes:
- Mandatory multi-step verification for refund disbursements and taxpayer communications
- Public awareness campaigns targeting high-risk states during peak tax months
- Enhanced fraud detection within tax software and online filing platforms
- Faster reporting and takedown mechanisms for fake IRS websites and impersonator accounts
Tax scams don’t get front-page attention—but they should. These schemes rely on fear and timing—often contacting people during peak filing season and using aggressive language. The IRS will never demand payment by phone or threaten arrest. Learn the signs, and don’t take the bait.
Methodology
The analysis uses BBB Scam Tracker data for 2025. The dataset focused on “tax collection” scam. It was first cleaned by removing entries not related to tax collection, then processed to identify cases with financial losses. State-level aggregations were performed to aggregate total cases, cases with financial loss, total losses, and average loss per case.
The risk score is a composite metric designed to compare the vulnerability of each state to tax scams by integrating multiple dimensions of scam impact. Each state’s score is computed by first normalizing key metrics using min-max normalization so that each metric is scaled between 0 and 1. This normalization ensures that differences in scale do not bias the overall score.
The five metrics used in the risk score and their weights are:
- Total Loss (35%): This reflects the total amount of money lost in scams for each state.
- Number of Successful Scam Cases (25%): This represents the count of scam cases where victims suffered financial loss.
- Average Loss per Case (15%): This captures the severity of individual cases by taking the average loss.
- Total Reported Cases (10%): This is the overall volume of scam reports, indicating the exposure of the state.
- Per Capita Loss (15%): This is the total loss normalized by the state’s population (loss per million residents), providing a measure of how intense the scam impact is relative to the state size.
