Tax fraud is evolving with the use of artificial intelligence (AI) by hackers. They are employing AI-powered techniques such as identity hijacking to file tax returns under other people's names and redirect the refunds to their own accounts. This alarming trend has been observed on the dark web. AI tax fraud involves stealing Personally Identifiable Information (PII) through phishing scams or malware and creating fraudulent IDs with the victim's details but the scammer's photograph. To combat this, experts recommend implementing more robust verification processes, such as cross-referencing IDs with DMV records. Individuals should file taxes early and take steps to protect themselves, including using strong passwords, employing identity theft protection services, and being cautious of suspicious links and downloads. The IRS website provides guidance for victims of tax fraud.

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